Exhibit 4.1
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of September 10, 2002
by and between
GLOBAL PAYMENT TECHNOLOGIES, INC.
and
JPMORGAN CHASE BANK
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS ...................................... 1
SECTION 1.01. Definitions .............................................. 1
SECTION 1.02. Terms Generally .......................................... 17
ARTICLE II LOANS ................................................................ 18
SECTION 2.01. Revolving Credit Loans ................................... 18
SECTION 2.02. Revolving Credit Note .................................... 19
SECTION 2.03. Term Loan ................................................ 19
SECTION 2.04. Term Note A .............................................. 19
SECTION 2.05. Term Loan ................................................ 20
SECTION 2.06. Term Note B .............................................. 20
ARTICLE III PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT; FEES AND PAYMENTS .. 21
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans ...... 21
SECTION 3.02. Use of Proceeds .......................................... 23
SECTION 3.03. Prepayments .............................................. 23
SECTION 3.04. Fees ..................................................... 24
SECTION 3.05. Inability to Determine Interest Rate ..................... 24
SECTION 3.06. Illegality ............................................... 24
SECTION 3.07. Increased Costs .......................................... 25
SECTION 3.08. Indemnity ................................................ 26
SECTION 3.09. Taxes .................................................... 27
SECTION 3.10. Payments ................................................. 27
SECTION 3.11. Disbursement of Loans .................................... 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES ....................................... 28
SECTION 4.01. Organization, Powers ..................................... 28
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations ...... 28
SECTION 4.03. Financial Condition ...................................... 29
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SECTION 4.04. Taxes .................................................... 29
SECTION 4.05. Title to Properties ...................................... 29
SECTION 4.06. Litigation ............................................... 30
SECTION 4.07. Agreements ............................................... 30
SECTION 4.08. Compliance with ERISA .................................... 30
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds ............. 30
SECTION 4.10. Approval ................................................. 31
SECTION 4.11. Subsidiaries and Direct Affiliates ....................... 31
SECTION 4.12. Hazardous Materials ...................................... 31
SECTION 4.13. Investment Company Act ................................... 31
SECTION 4.14. No Default ............................................... 32
SECTION 4.15. Material Contracts ....................................... 32
SECTION 4.16. Permits and Licenses ..................................... 32
SECTION 4.17. Compliance with Law ...................................... 32
SECTION 4.18. Disclosure ............................................... 32
SECTION 4.19. Security Documents ....................................... 32
ARTICLE V CONDITIONS OF LENDING ................................................. 32
SECTION 5.01. Conditions to Initial Extension of Credit ................ 32
SECTION 5.02. Conditions to All Extensions of Credit ................... 35
ARTICLE VI AFFIRMATIVE COVENANTS ................................................ 36
SECTION 6.01. Existence, Properties, Insurance ......................... 36
SECTION 6.02. Payment of Indebtedness and Taxes ........................ 36
SECTION 6.03. Financial Statements, Reports, etc ....................... 37
SECTION 6.04. Books and Records; Access to Premises .................... 38
SECTION 6.05. Notice of Adverse Change ................................. 38
SECTION 6.06. Notice of Default ........................................ 39
SECTION 6.07. Notice of Litigation ..................................... 39
SECTION 6.08. Notice of Default in Other Agreements .................... 39
SECTION 6.09. Notice of ERISA Event .................................... 39
SECTION 6.10. Notice of Environmental Law Violations ................... 40
SECTION 6.11. Notice Regarding Material Contracts ...................... 40
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SECTION 6.12. Compliance with Applicable Laws .......................... 40
SECTION 6.13. Subsidiaries and Direct Affiliates ....................... 40
SECTION 6.14. Environmental Laws ....................................... 40
SECTION 6.15. Notice and Acknowledgment of Assignment .................. 41
ARTICLE VII NEGATIVE COVENANTS .................................................. 41
SECTION 7.01. Liens .................................................... 41
SECTION 7.02. Indebtedness ............................................. 42
SECTION 7.03. Guaranties ............................................... 43
SECTION 7.04. Sale of Assets ........................................... 44
SECTION 7.05. Sales of Receivables ..................................... 44
SECTION 7.06. Loans and Investments .................................... 44
SECTION 7.07. Nature of Business ....................................... 45
SECTION 7.08. Sale and Leaseback ....................................... 45
SECTION 7.09. Federal Reserve Regulations .............................. 45
SECTION 7.10. Accounting Policies and Procedures ....................... 45
SECTION 7.11. Hazardous Materials ...................................... 45
SECTION 7.12. Limitations on Fundamental Changes ....................... 45
SECTION 7.13. Financial Covenants ...................................... 46
SECTION 7.14. Subordinated Debt ........................................ 48
SECTION 7.15. Dividends ................................................ 48
SECTION 7.16. Transactions with Affiliates ............................. 48
ARTICLE VIII EVENTS OF DEFAULT .................................................. 48
SECTION 8.01. Events of Default ........................................ 48
ARTICLE IX MISCELLANEOUS ........................................................ 51
SECTION 9.01. Notices .................................................. 51
SECTION 9.02. Effectiveness; Survival .................................. 52
SECTION 9.03. Expenses ................................................. 52
SECTION 9.04. Successors and Assigns; Participations ................... 52
SECTION 9.05. No Waiver; Cumulative Remedies ........................... 53
SECTION 9.06. APPLICABLE LAW ........................................... 53
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SECTION 9.07. SUBMISSION TO JURISDICTION ............................... 53
SECTION 9.08. Severability ............................................. 54
SECTION 9.09. Right of Setoff .......................................... 54
SECTION 9.10. Headings ................................................. 54
SECTION 9.11. Construction ............................................. 55
SECTION 9.12. Counterparts ............................................. 55
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SCHEDULES
Schedule I - Existing Liens
Schedule II - Pre-Existing Indebtedness
Schedule III - Existing Guarantees
Schedule IV - Material Contracts
Schedule V - Subsidiaries and other Direct Affiliates
Schedule VI - Existing Direct Affiliate Investments
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note A
Exhibit C - Form of Term Note B
Exhibit D-1 - Form of Unlimited Corporate Guaranty
Exhibit D-2 - Form of Limited Corporate Guaranty
Exhibit E - Form of Security Agreement
Exhibit F - Form of Pledge Agreement
Exhibit G - [RESERVED]
Exhibit H - Form of Opinion of Counsel
Exhibit I - Form of Monthly Sales, Headcount and Inventory Report
Exhibit J - Form of Notice and Acknowledgment of Assignment
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 10, 2002, by
and between GLOBAL PAYMENT TECHNOLOGIES, INC., a Delaware corporation (the
"Company") and JPMORGAN CHASE BANK, a New York banking corporation, (the
"Lender").
RECITALS
WHEREAS; each of the parties hereto is a party to the Prior Credit
Agreement (as hereinafter defined);
WHEREAS; the parties hereto desire to amend in various respects and
restate the Prior Credit Agreement;
NOW THEREFORE the parties hereto agree to amend and restate the Prior
Credit Agreement in its entirety as follows:
The Company has requested the Lender to extend credit from time to time
and the Lender is willing to extend such credit to the Company, subject to the
terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Definitions. As used herein, the following words and terms
shall have the following meanings:
"Adjusted Libor Loans" shall mean Loans at such time as they are made
and/or being maintained at a rate of interest based upon Reserve Adjusted Libor.
"Affiliate" shall mean with respect to a specified Person, another Person
which, directly or indirectly, controls or is controlled by or is under common
control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the power, direct or indirect, to direct or
cause the direction of the management or policies of such Person whether through
the ownership of voting securities, by contract or otherwise; provided that, in
any event, any Person who owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interest of any Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person.
"Aggregate Outstandings" shall mean, at a particular time, the aggregate
outstanding principal amount of all Revolving Credit Loans at such time.
"Agreement" shall mean this Amended and Restated Credit Agreement dated as
of September 10, 2002, as it may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate as in effect on such day, and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the Lender shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Lender to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loans" shall mean Loans at such times as they are
being made and/or maintained at a rate of interest based on the Alternate Base
Rate.
"Australia Joint Venture Agreement" shall mean collectively (i) the Back
to Back Agreement Terms dated July 5, 2001 by and between the Company and Global
Payment Technologies, Australia Pty. Ltd. and (ii) the Terms and Conditions
Agreement executed on June 20, 2001 by Global Payment Technologies Australia
Pty. Ltd. and on August 7, 2001 by Aristocrat Technologies Australia Pty. Ltd.
"Borrowing Date" shall mean, with respect to any Loan, the date on which
such Loan is disbursed to the Company.
"Business Day" shall mean (a) any day not a Saturday, Sunday or legal
holiday, on which banks in New York City are open for business and (b) as it
relates to any payment, determination, funding or notice to be made or given in
connection with any Adjusted Libor Loan, any day specified in clause (a) on
which trading is carried on by and between banks in Dollar deposits in the
London interbank eurodollar market.
"Capital Lease" shall mean any lease the obligations of which are required
to be capitalized on the balance sheet of a Person in accordance with Generally
Accepted Accounting Principles.
"Change of Control" shall mean (a) the acquisition by any Person (other
than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or an entity of which all of the outstanding capital
stock is owned by Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or Odyssey Financial Company if Mr.
▇▇▇▇▇▇▇ ▇▇▇▇ has the power directly or indirectly through his nominees to vote
the capital stock of a Person held by Odyssey Financial Company and to control
the disposition of such capital stock), or two or more Persons (other
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than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ or an entity of which all of the outstanding capital stock
is owned by Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or Odyssey Financial Company if Mr. ▇▇▇▇▇▇▇
▇▇▇▇ has the power directly or indirectly through his nominees to vote the
capital stock of a Person held by Odyssey Financial Company and to control the
disposition of such capital stock) acting in concert, of beneficial ownership of
25% or more of the outstanding shares of voting stock (as determined below) of
the Company, or (b) at any time Continuing Directors do not constitute a
majority of the Board of Directors of the Company. "Continuing Director" means
at any date a member of the Company's Board of Directors (i) who is a member of
such Board on the Closing Date or (ii) who was nominated or elected by at least
two-thirds of the directors who were Continuing Directors at any time of such
nomination or election or whose election to the Company's Board of Directors was
recommended or endorsed by at least two-thirds of the directors who were
Continuing Directors at the time of such election. Under this definition, if the
present Board of Directors of the Company were to nominate, elect, recommend,
endorse or otherwise approve a new director or directors and then resign, no
Change of Control would occur even though the present Board of Directors would
thereafter cease to be in office. A "beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, as in effect on the
Closing Date, except that, for purposes of clause (a), the number of shares of
capital stock of the Company entitling the holders thereof to vote generally in
elections of directors shall be deemed to include, in addition to all
outstanding shares of capital stock of the Company entitling the holders thereof
to vote generally in the election of directors and Unissued Shares deemed to be
held by the Person with respect to which the Change of Control determination is
being made, all Unissued Shares deemed to be held by all other Persons. As used
herein, "Unissued Shares" shall mean shares of capital stock of the Company not
outstanding that are subject to options, warrants, rights to purchase or
conversion privileges exercisable within 60 days following the date of
determination of a Change of Control and that, upon issuance, shall entitle the
holders thereof to vote generally in the election of directors.
"Chief Financial Officer" shall mean the Chief Financial Officer of the
Company.
"Closing Date" shall mean September 10, 2002.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitments" shall mean, collectively, the Revolving Credit Commitment
and the Term Loan Commitments.
"Company" shall have the meaning set forth in the preamble hereto.
"Consequential Loss" shall mean, with respect to the Company's payment of
all or any portion of a Fixed Rate Loan, except in accordance with the payment
schedule set forth in the Term Notes, on a day other than the Term Loan A
Maturity Date, with respect to Term Loan A, or the Term Loan B Maturity Date,
with respect to Term Loan B, any loss, cost or expense incurred by the Lender as
a result of the timing of such payment or in redepositing such principal
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amount, including the sum of (a) the interest which, but for such payment, the
Lender would have earned in respect of such principal amount so paid until the
Term Loan A Maturity Date, with respect to Term Loan A, or the Term Loan B
Maturity Date, with respect to Term Loan B, reduced, if the Lender is able to
redeposit such principal amount so paid for the balance of such period, by the
interest earned by the Lender as a result of so redepositing such principal
amount, plus (b) any expense or penalty incurred by the Lender on redepositing
such principal amount.
"Consolidated Current Liabilities" shall mean, on the date of
determination, the aggregate amount of liabilities of the Company and the
Guarantors, on a consolidated basis, which would be classified as current
liabilities, computed in accordance with Generally Accepted Accounting
Principles, applied on a consistent basis; provided, however, that the aggregate
outstanding Revolving Credit Loans on the date of determination thereof shall be
included as Consolidated Current Liabilities.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income (or net loss), plus the sum, without duplication, of (a) Consolidated
Interest Expense, (b) all income taxes to any government or governmental
instrumentality expensed on the Company's and each Guarantor's books (whether
paid or accrued), and (c) all cash dividends received by the Company and any
Guarantor from any Unconsolidated Affiliate, minus the sum, without duplication,
of (a) all extraordinary or unusual gains, and (b) equity in positive income of
Unconsolidated Affiliates, in each case, determined in accordance with Generally
Accepted Accounting Principles applied on a consistent basis. All of the
foregoing categories shall be calculated with respect to the Company and the
Guarantors, on a consolidated basis, and shall be calculated (without
duplication) as of the end of each calendar month for the twelve consecutive
calendar months then ended commencing with the twelve month period ending
September 30, 2003, provided, however, that (i) for the fiscal quarter ending
March 31, 2003, all such categories shall be calculated with respect to the two
fiscal quarters then ending, and (ii) for the fiscal quarter ending June 30,
2003, all such categories shall be calculated with respect to the three fiscal
quarters then ending.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
(or net loss), plus the sum, without duplication, of (a) Consolidated Interest
Expense, (b) depreciation and amortization expenses or charges, (c) all income
taxes to any government or governmental instrumentality expensed on the
Company's and each Guarantor's books (whether paid or accrued), and (d) all cash
dividends received by the Company and any Guarantor from any Unconsolidated
Affiliate, minus the sum, without duplication, of (a) all extraordinary or
unusual gains and (b) equity in positive income of Unconsolidated Affiliates, in
each case, determined in accordance with Generally Accepted Accounting
Principles applied on a consistent basis. All of the foregoing categories shall
be calculated with respect to the Company and the Guarantors, on a consolidated
basis, and shall be calculated (without duplication) as of the end of each
calendar month for the twelve consecutive calendar months then ended commencing
with the twelve month period ending September 30, 2003, provided, however, that
(i) for the fiscal quarter ending December 31, 2002, all such categories shall
be calculated with respect to the one fiscal quarter then ending, (ii) for the
fiscal quarter ending March 31, 2003, all such categories shall be
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calculated with respect to the two fiscal quarters then ending, and (iii) for
the fiscal quarter ending June 30, 2003, all such categories shall be calculated
with respect to the three fiscal quarters then ending.
"Consolidated Funded Debt" shall mean, on the date of determination, all
debt for borrowed money of the Company and Guarantors, on a consolidated basis,
with an original maturity of one year or more, including the current portion
thereof and including, without limitation, the outstanding principal amount of
the Loans. Funded Debt shall be calculated as of the end of each calendar month
commencing with the calendar month ending September 30, 2003, provided, however
that Funded Debt shall be calculated to be equal to (i) twenty five percent
(.25) of the actual Funded Debt as of December 31, 2002, with respect to the
calendar months included in the fiscal quarter ending December 31, 2002, (ii)
fifty percent (50%) of the actual Funded Debt as of March 31, 2003, with respect
to the calendar months included in the fiscal quarter ending March 31, 2003, and
(iii) seventy-five percent (75%) of the actual Funded Debt as of June 30, 2003,
with respect to the calendar months included in the fiscal quarter ending June
30, 2003.
"Consolidated Interest Coverage Ratio" shall mean, on the date of
determination, the ratio of (a) Consolidated EBIT to (b) Consolidated Interest
Expense.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of the Company and the Guarantors, on a consolidated basis,
determined in accordance with Generally Accepted Accounting Principles applied
on a consistent basis and calculated as of the end of each calendar month for
the twelve calendar months then ended commencing with the twelve month period
ending September 30, 2003, provided, however that (i) for the fiscal quarter
ending March 31, 2003, gross interest expense shall be calculated with respect
to the two fiscal quarters then ending and (ii) for the fiscal quarter ending
June 30, 2003, gross interest expense shall be calculated with respect to the
three fiscal quarters then ending.
"Consolidated Interim EBIT" shall mean, for any period, Consolidated Net
Income (or net loss), plus the sum, without duplication, of (a) Consolidated
Interim Interest Expense, (b) all income taxes to any government or governmental
instrumentality expensed on the Company's and each Guarantor's books (whether
paid or accrued), and (c) all cash dividends received by the Company and any
Guarantor from any Unconsolidated Affiliate, minus the sum, without duplication,
of (x) all extraordinary or unusual gains, and (y) equity in positive income of
Unconsolidated Affiliates, in each case, determined in accordance with Generally
Accepted Accounting Principles applied on a consistent basis. All of the
foregoing categories shall be calculated with respect to the Company and the
Guarantors, on a consolidated basis, and shall be calculated (without
duplication) as of the end of each applicable fiscal quarter solely for the
fiscal quarter then ended.
"Consolidated Interim Interest Expense" shall mean, for any period, the
gross interest expense of the Company and the Guarantors, on a consolidated
basis, determined in accordance
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with Generally Accepted Accounting Principles applied on a consistent basis and
calculated as of the end of each applicable fiscal quarter solely for the fiscal
quarter then ended.
"Consolidated Net Income" shall mean, for any period, the net income (or
net loss) of the Company and the Guarantors, on a consolidated basis, for such
period determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.
"Consolidated Quick Assets" shall mean, on the date of determination, the
aggregate amount of all cash, cash equivalents and Receivables arising from
trade transactions in the ordinary course of business of the Company and the
Guarantors, on a consolidated basis, in each case determined in accordance with
Generally Accepted Accounting Principles, applied on a consistent basis, except
that there shall be excluded from the calculation thereof any Receivable due
from any Affiliate of the Company or any Guarantor if (a) more than sixty (60)
days have elapsed from the invoice due date with respect to such Receivable or
(b) any such Receivables are due more than (i) one hundred fifty (150) days from
the invoice date with respect to any Receivable owing from Global Payment
Technologies Australia Pty. Ltd. or (ii) ninety (90) days from the invoice date
with respect to any Receivable owing from any other Unconsolidated Affiliate.
"Consolidated Tangible Net Worth" shall mean, as of the date of
determination, (a) total assets of the Company and the Guarantors, on a
consolidated basis, without giving effect to any write-up or increase in value
of any asset due to the re-evaluation thereof, except that there shall be
excluded therefrom (to the extent included therein) (i) all obligations due to
the Company or any Guarantor from an Affiliate other than (I) Receivables due
from any Affiliate of the Company or such Guarantor if (a) less than sixty (60)
days have elapsed from the invoice due date with respect to such Receivable, and
(b) such Receivables are due less than (x) one hundred fifty (150) days from the
invoice date with respect to Receivables owing from Global Payment Technologies
Australia Pty. Ltd. or (y) ninety (90) days from the invoice date with respect
to Receivables owing from the other Unconsolidated Affiliates, and (II) loans
and investments permitted pursuant to Section 7.06(c) to the extent such loans
and investments would be included in total assets in accordance with Generally
Accepted Accounting Principles consistently applied, and (ii) all intangible
assets including, without limitation, organizational expenses, patents,
trademarks, copyrights, goodwill, covenants not to compete, research and
development costs, training costs and all unamortized debt discount and deferred
charges, less (b) total liabilities of the Company and the Guarantors, on a
consolidated basis, in each case, determined in accordance with Generally
Accepted Accounting Principles applied on a consistent basis.
"Consolidated Total Unsubordinated Liabilities" shall mean, on the date of
determination, all items which, in accordance with Generally Accepted Accounting
Principles applied on a consistent basis, would properly be included on the
liability side of the balance sheet (other than capital stock, capital surplus,
treasury stock, retained earnings and Subordinated Indebtedness), of the Company
and the Guarantors, on a consolidated basis, computed in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.
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"Default" shall mean any condition or event which upon notice, lapse of
time or both would constitute an Event of Default.
"Direct Affiliates" shall mean, collectively, each direct and indirect
Subsidiary of the Company and each other Person controlled by the Company or
collectively by the Company and its direct or indirect Subsidiaries. For
purposes of this definition "control" of a Person shall have the meaning set
forth in the second sentence of the definition of "Affiliate".
"Dollar" and the symbol "$" shall mean lawful money of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary of the Company which is
organized under the laws of any state or territory of the United States of
America.
"Eligible Investments" shall mean (a) direct obligations of the United
States of America or any governmental agency thereof which are fully guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; or (b) dollar denominated
certificates of time deposit maturing within one year issued by any bank
organized and existing under the laws of the United States or any state thereof
and having aggregate capital and surplus in excess of $1,000,000,000; or (c)
money market mutual funds having assets in excess of $2,500,000,000; or (d)
commercial paper rated not less than P-1 or A-1 or their equivalent by ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Ratings Group, respectively; or (e)
tax exempt securities of a U.S. issuer rated A or better by Standard and Poor's
Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.
"Environmental Law" shall mean any law, ordinance, rule, regulation, or
policy having the force of law of any Governmental Authority relating to
pollution or protection of the environment or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations
promulgated pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or any Subsidiary of the Company would be
deemed to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Eurocurrency Reserve Requirement" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
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emergency reserves, under any regulations of the Board of Governors of the
Federal Reserve System or any other governmental authority having jurisdiction
with respect thereto) as from time to time in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"eurocurrency liabilities" in Regulation D) maintained by the Lender. For
purposes hereof each Adjusted Libor Loan shall be deemed to constitute a
"eurocurrency liability" as defined in Regulation D, and subject to the reserve
requirements of "Regulation D," without benefit of credit or proration,
exemptions or offsets which might otherwise be available to the Lenders from
time to time under Regulation D.
"Event of Default" shall have the meaning set forth in Article VIII.
"Executive Officer" shall mean any of the President, the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer or the Secretary of
the Company, and their respective successors, if any, designated by the
Company's board of directors.
"Exercise Period" shall mean the period commencing the date hereof and
ending on the sixth month anniversary of such date.
"Existing Direct Affiliate" shall mean a Direct Affiliate of the Company
existing on the Closing Date.
"Existing Direct Affiliate Investments" shall mean guarantees, loans and
capital contributions made by the Company from time to time to each Direct
Affiliate set forth on Schedule VI hereto provided, subject to Sections 7.03(e)
and 7.06(c), the sum of (a) the aggregate outstanding principal amount of all
loans to such Direct Affiliate, (b) the aggregate outstanding capital
contributions to such Direct Affiliate, and (c) the aggregate obligations of
such Direct Affiliate guaranteed by the Company shall not exceed the amount set
forth opposite the name of such Direct Affiliate on Schedule VI hereto.
"Existing Indebtedness" shall mean the Revolving Credit Loan outstanding
pursuant to the Prior Credit Agreement.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal fund brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Lender from
three Federal fund brokers of recognized standing selected by the Lender.
"Fixed Rate" shall mean (a) 7.66%, with respect to Term Loan A, or (b) a
rate of interest per annum quoted to the Company by the Lender in its
discretion, at approximately 11:00 a.m., New York City time, on the requested
date of conversion of Term Loan B to a Fixed Rate Loan in accordance with
Section 3.01(i). Such rates shall be the respective fixed rates applicable to
the Fixed Rate Loans made by the Lender on the requested date for such Fixed
Rate Loans in the
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specified amount and for the period commencing on the requested date and ending
on the Term Loan A Maturity Date, with respect to Term Loan A, or, if
applicable, the Term Loan B Maturity Date, with respect to Term Loan B.
Notwithstanding any other provision of this Agreement, the rate so quoted by the
Lender shall be determined in the sole discretion of the Lender by reference to
such factors and considerations as the Lender shall deem relevant.
"Fixed Rate Loan" shall mean a Term Loan at such time as it is made/or
being maintained at the rate of interest based upon the Fixed Rate.
"Foreign Account Debtors" shall mean and include the account debtor or
obligor, with respect to any Receivable, which is not (i) a United States
Person, or (ii) an obligor in the United States.
"Foreign Subsidiary" shall mean any Subsidiary of the Company other than a
Domestic Subsidiary.
"Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles in the United States of America, as in effect
from time to time.
"Governmental Authority" shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
"Guarantor" shall mean Abacus Financial Management Systems Ltd., USA, and
each Person who, from time to time, is required to execute a Guaranty in
accordance with Section 6.13; provided such Person's status as a Guarantor shall
be effective as of the date of such execution.
"Guaranty" shall mean, collectively, the Unlimited Corporate Guaranty and
the Limited Corporate Guaranty.
"Hazardous Materials" shall mean any explosives, radioactive materials, or
other materials, wastes, substances, or chemicals regulated as toxic hazardous
or as a pollutant, contaminant or waste under any applicable Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap, floor
or forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of the Company or any of its Subsidiaries and any confirming letter
executed pursuant to such agreement, all as amended, supplemented, restated or
otherwise modified from time to time.
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"Indebtedness" shall mean, without duplication, as to any Person or
Persons (a) indebtedness for borrowed money; (b) indebtedness for the deferred
purchase price of property or services; (c) indebtedness evidenced by bonds,
debentures, term notes or other similar instruments; (d) obligations and
liabilities secured by a Lien upon property owned by such Person, whether or not
owing by such Person and even though such Person has not assumed or become
liable for the payment thereof; (e) obligations and liabilities directly or
indirectly guaranteed by such Person; (f) obligations or liabilities created or
arising under any conditional sales contract or other title retention agreement
with respect to property used and/or acquired by such Person; (g) obligations of
such Person as lessee under Capital Leases; (h) net liabilities of such Person
under Hedging Agreements and foreign currency exchange agreements, as calculated
in accordance with accepted practice; (i) all obligations of such Person in
respect of bankers' acceptance; and (j) all obligations, contingent or otherwise
of such Person as an account party or applicant in respect of letters of credit.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan
and any Fixed Rate Loan, the last day of each calendar month during the term
hereof; (b) as to any Adjusted Libor Loan, with respect to which the Company has
selected an Interest Period of one, two or three months, the last day of the
Interest Period for such Adjusted Libor Loan; (c) as to any Adjusted Libor Loan,
with respect to which the Company has selected an Interest Period of six, nine
or twelve months, the date which is three months from the first date of such
Interest Period and the last day of each three month period thereafter and the
last day of such Interest Period; and (d) as to any Loan, the date such Loan is
paid in full or in part.
"Interest Period" shall mean with respect to any Adjusted Libor Loan:
(a) initially, the period commencing on the date such Adjusted Libor
Loan is made and ending one, two, three, six, nine or twelve months thereafter,
as selected by the Company in its notice of borrowing or in its notice of
conversion from an Alternate Base Rate Loan provided, in each case, in
accordance with the terms of Articles II and III hereof; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Adjusted Libor Loan and ending one,
two, three, six, nine or twelve months thereafter, as selected by the Company by
irrevocable written notice to the Lender not later than 11:00 a.m. New York, New
York time three Business Days prior to the last day of the then current Interest
Period with respect to such Adjusted Libor Loan; provided, however, that all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month
in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) if the Company shall fail to give notice as provided in
clause (b) above, the Company shall be deemed to have requested
conversion of the affected
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Adjusted Libor Loan to an Alternate Base Rate Loan on the last day
of the then current Interest Period with respect thereto;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iv) no more than four (4) Interest Periods may exist at any
one time; and
(v) the Company shall select Interest Periods so as not to
require a payment or prepayment of any Adjusted Libor Loan during an
Interest Period for such Adjusted Libor Loan.
"Interest Rate Margin" shall mean (a) with respect to each Adjusted Libor
Loan, the percentage set forth below under the heading "Libor Margin" opposite
the applicable ratio, (b) with respect to each Alternate Base Rate Loan, the
percentage set forth below under the heading "ABR Margin" opposite the
applicable ratio, and (c) with respect to Term Loan A, the percentage set forth
below under the heading "Fixed Rate Margin" opposite the applicable ratio.
Consolidated Funded Debt Libor Margin ABR Margin Fixed Rate Margin
to Consolidated EBITDA (360 day basis) (360 day basis) (360 day basis)
---------------------- --------------- --------------- ---------------
Less than 1.50:1.00 1.50% 0.0% 0.0%
Greater than or equal to 1.75% 0.0% 0.0%
1.50:1.00 but less than
1.75:1.00
Greater than or equal to 2.25% 0.25% 0.50%
1.75:1.00 but less than
2.50:1.00
Greater than or equal to 2.75% 0.75% 1.00%
2.50:1.00 but less than
3.00:1.00
Greater than or equal to 3.00% 1.00% 1.25%
3.00:1.00 but less than
3.50:1.00
Greater than or equal to 3.50% 1.50% 1.75%
3.50:1.00
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Notwithstanding the foregoing, during the period commencing the Closing
Date and ending on the fifth Business Day following the date of delivery of the
financial statements to the Lender for the fiscal quarter ending June 30, 2003,
(a) the Interest Rate Margin with respect to each Adjusted Libor Loan shall be
3.50% per annum, (b) the Interest Rate Margin with respect to each Alternate
Base Rate Loan shall be 1.50% per annum and (c) the Interest Rate Margin with
respect to Term Loan A shall be 1.75%. The Interest Rate Margin will be set or
reset quarterly with respect to each Loan on the date which is five Business
Days following the date of receipt by the Lender of the financial statements
referred to in Section 6.03(a) or Section 6.03(b), as applicable, together with
a certificate of the Chief Financial Officer of the Company certifying the ratio
of Consolidated Funded Debt to Consolidated EBITDA and setting forth the
calculation thereof in detail; provided, however, if any such financial
statement and certificate are not received by the Lender within the time period
required pursuant to Section 6.03(a) or Section 6.03(b), as the case may be, the
Interest Rate Margin will be set or reset, unless the rate of interest specified
in Section 3.01(d) is in effect, based on a ratio of Consolidated Funded Debt to
Consolidated EBITDA of greater than or equal to 3.50:1.00 from the date such
financial statement and certificate were due until the date which is five
Business Days following the receipt by the Lender of such financial statements
and certificate, and provided, further, that the Lender shall not in any way be
deemed to have waived any Default or Event of Default, including, without
limitation, an Event of Default resulting from the failure of the Company to
comply with Section 7.13 of this Agreement, or any rights or remedies hereunder
or under any other Loan Document in connection with the foregoing proviso.
During the occurrence and continuance of an Event of Default, no downward
adjustment, and only upward adjustments, shall be made to the Interest Rate
Margin.
"Lender" shall have the meaning set forth in the preamble hereto.
"Lien" shall mean any lien (statutory or otherwise), security interest,
mortgage, deed of trust, pledge, charge, conditional sale, title retention
agreement, Capital Lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Limited Corporate Guaranty" shall mean the Amended and Restated Limited
Corporate Guaranty in the form attached hereto as D-2 to be executed and
delivered by each Domestic Subsidiary which is not directly or indirectly
wholly-owned by the Company on the Closing Date and thereafter by each such
Domestic Subsidiary of the Company pursuant to Section 6.13, as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Guaranty, the Security Documents, each Hedging Agreement between the Company and
the Lender, the Notice of Acknowledgment and Assignment, and each other
agreement executed in connection with the transactions contemplated hereby or
thereby, as each of the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Loans" shall mean, collectively, the Revolving Credit Loans and the Term
Loans.
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"Material Adverse Effect" shall mean a material adverse effect upon (a)
the business, operations, property, prospects or condition (financial or
otherwise) of the Company or the Company and its Subsidiaries taken as a whole,
or (b) the ability of the Company or any Guarantor to perform in any material
respect any material obligations under any Loan Document to which it is a party.
"Material Contract" shall mean each (a) joint venture agreement and each
exclusive and preferred supplier agreement entered into by the Company or any of
its Subsidiaries and (b) contract, instrument or agreement (i) to which the
Company or any Subsidiary is a party which is material to the business,
operations or condition (financial or otherwise), prospects, or properties of
the Company or the Company and its Subsidiaries taken as a whole, or (ii) which
requires the payment during the term thereof in excess of $250,000.
"New Direct Affiliate" shall mean a Direct Affiliate formed, acquired or
established after the Closing Date.
"Notes" shall mean, collectively, the Revolving Credit Note and the Term
Notes.
"Notice of Acknowledgment and Assignment" shall mean the Notice of
Acknowledgment and Assignment in the form attached hereto as Exhibit J hereto.
"Obligations" shall mean all obligations, liabilities and indebtedness of
the Company to the Lender, whether now existing or hereafter created, absolute
or contingent, direct or indirect, due or not, whether created directly or
acquired by assignment or otherwise, including, without limitation, all
obligations, liabilities and indebtedness, (a) arising under or relating to this
Agreement, the Notes or any other Loan Document including, without limitation,
all obligations, liabilities and indebtedness of the Company with respect to the
principal of and interest on the Loans, and the obligations arising under
Hedging Agreements with the Lender and all fees, costs, expenses and indemnity
obligations of the Company hereunder and under any other Loan Document and (b)
arising under foreign currency exchange agreements with the Lender .
"Payment Office" shall mean the Lender's office located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Lender may
designate from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" shall mean the Liens specified in clauses (a) through
(i) of Section 7.01.
"Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, business trust, joint venture,
association, company, partnership or Governmental Authority.
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"Plan" shall mean any multi-employer or single-employer plan defined in
Section 4001 of ERISA, which covers, or at any time during the five calendar
years preceding the date of this Agreement covered, employees of the Company or
an ERISA Affiliate on account of such employees' employment by the Company or an
ERISA Affiliate.
"Pledge Agreement" shall mean collectively, (a) the Pledge Agreement dated
July 13, 1999 executed by the Company and the Lender, as amended and affirmed
pursuant to a reaffirmation of pledge agreement to be executed on the Closing
Date pursuant to Section 5.01(d) and (b) the Pledge Agreement, substantially in
the form of Exhibit F attached hereto, to be executed and delivered by the
Company and/or its Domestic Subsidiaries pursuant to Section 6.13 with respect
to the outstanding capital stock of each Foreign Subsidiary created or acquired
after the Closing Date, as each of the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Prime Rate" shall mean the rate per annum announced by the Lender from
time to time as its prime rate in effect at its principal office, each change in
the Prime Rate shall be effective on the date such change is announced to become
effective.
"Prior Closing Date" shall mean July 15, 1999.
"Prior Credit Agreement" shall mean the Credit Agreement dated as of July
15, 1999, as amended, restated, supplemented or otherwise modified prior to the
date hereof.
"Receivables" shall mean any and all rights of the Company and any
Guarantor to payment for goods sold or leased or for services rendered,
including accounts, contract rights, general intangibles and any such right
evidenced by chattel paper, instruments or documents.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30 day notice requirement has not
been waived by the PBGC.
"Reserve Adjusted Libor" shall mean with respect to the Interest Period
pertaining to an Adjusted Libor Loan, the rate per annum equal to the product
(rounded upwards to the next higher 1/16 of one percent) of (a) the annual rate
of the interest at which Dollar deposits of an amount comparable to the amount
of such Loan and for a period equal to the Interest Period applicable thereto
are offered to the Lender in immediately available funds in the London interbank
market for eurodollars at approximately 11:00 A.M. (London time) on the second
Business Day prior to the commencement of such Interest Period, multiplied by
(b) the Eurocurrency Reserve Requirement.
"Revolving Credit Commitment" shall mean the Lender's obligation to make
Revolving Credit Loans to the Company in an aggregate amount not to exceed
$3,500,000, as such amount may be adjusted in accordance with the terms of this
Agreement.
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"Revolving Credit Commitment Period" shall mean the period from and
including the Closing Date to, but not including, the Revolving Credit
Commitment Termination Date or such earlier date as the Revolving Credit
Commitment to extend Revolving Credit Loans shall terminate as provided herein.
"Revolving Credit Commitment Termination Date" shall mean the third
anniversary of the Closing Date.
"Revolving Credit Loans" shall have the meaning set forth in Section
2.01(a).
"Revolving Credit Note" shall have the meaning set forth in Section 2.02.
"Security Agreement" shall mean the Security Agreement in the form
attached as Exhibit E to be executed and delivered on the Closing Date by
Company and each Guarantor, as each of the same may be amended, restated,
supplemented or otherwise modified, from time to time.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Collateral Assignment and each other collateral security document
delivered to the Lender hereunder.
"Solvent" shall mean with respect to any Person as of the date of
determination thereof that (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required on its debts as such debts become absolute
and matured, (c) such Person will not have as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such Person
will be able to pay its debts as they mature.
"Subordinated Indebtedness" shall mean all debt which is subordinated in
right of payment to the prior final and indefeasible payment in full of the
obligations of the Company to the Lender hereunder and under any other Loan
Document on terms satisfactory to and approved in writing by the Lender.
"Subsidiaries" shall mean with respect to any Person any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled, directly
or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Taxes" shall have the meaning set forth in Section 3.09.
"Term Loan A" shall have the meaning set forth in Section 2.03.
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"Term Loan A Commitment" shall mean the Lender's obligation to make Term
Loan A on the Prior Closing Date to the Company in an amount equal to
$4,000,000, of which $1,466,654 remains outstanding as of the Closing Date.
"Term Loan A Maturity Date" shall mean June 30, 2004.
"Term Loan B" shall have the meaning set forth in Section 2.05.
"Term Loan B Commitment" shall mean the Lender's obligation to make Term
Loan B on the Closing Date to the Company in an amount equal to $2,033,000.
"Term Loan B Maturity Date" shall mean August 31, 2007.
"Term Loan Commitments" shall mean, collectively, the Term Loan A
Commitment and the Term Loan B Commitment.
"Term Loans" shall mean Term Loan A and Term Loan B.
"Term Note A" shall have the meaning set forth in Section 2.04.
"Term Note B" shall have the meaning set forth in Section 2.06.
"Term Notes" shall mean Term Note A and Term Note B.
"Total Commitment" shall mean, at any time, the aggregate of the
Commitments in effect at such time which, initially, shall be $6,999,654.
"Type" shall mean as to any Loan its status as an Alternate Base Rate
Loan, an Adjusted Libor Loan or a Fixed Rate Loan.
"Unconsolidated Affiliates" shall mean those Affiliates of the Company and
the Guarantors which are accounted for on the consolidated financial statements
of the Company in accordance with the equity method of accounting applied on a
consistent basis.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unlimited Corporate Guaranty" shall mean the Unlimited Corporate Guaranty
in the form attached hereto as Exhibit D-1 to be executed and delivered by each
direct and indirect wholly-owned Domestic Subsidiary of the Company on the
Closing Date and thereafter by each such Domestic Subsidiary pursuant to Section
6.13, as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
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"Unused Fee Rate" shall mean the percentage set forth below opposite the
applicable ratio.
Consolidated Funded Debt
to Consolidated EBITDA Unused Fee Rate (360 day basis)
---------------------- -------------------------------
Less than 1.50:1.00 0.25%
Greater than or equal to 1.50:1.00 but 0.25%
less than 1.75:1.00
Greater than or equal to 1.75:1.00 but 0.375%
less than 2.50:1.00
Greater than or equal to 2.50:1.00 but 0.50%
less than 3.00:1.00
Greater than or equal to 3.00:1.00 but 0.625%
less than 3.50:1.00
Greater than or equal to 3.50:1.00 0.625%
Notwithstanding the foregoing, during the period commencing the Closing
Date and ending on the fifth Business Day following the date of the delivery of
the financial statements for the fiscal quarter ending June 30, 2003, the Unused
Fee Rate shall be .625%. The Unused Fee Rate will be set or reset quarterly on
the date which is five Business Days following the date of receipt by the Lender
of the financial statements referred to in Section 6.03(a) or Section 6.03(b),
as applicable, together with a certificate of the Chief Financial Officer of the
Company certifying the ratio of Consolidated Funded Debt to Consolidated EBITDA
and setting forth the calculation thereof in detail; provided, however, if any
such financial statement and certificate are not received by the Lender within
the time period required pursuant to Section 6.03(a) or Section 6.03(b), as the
case may be, the Unused Fee Rate will be set or reset, based on a ratio of
Consolidated Funded Debt to Consolidated EBITDA of greater than or equal to
3.50:1.00 from the date such financial statement and certificate were due until
the date which is five Business Days following the receipt by the Lender of such
financial statements and certificate, and provided, further, that the Lender
shall not in any way be deemed to have waived any Default or Event of Default,
including without limitation, an Event of Default resulting from the failure of
the Company to comply with Section 7.13 of this Agreement, or any rights or
remedies hereunder or under any other Loan Document in connection with the
foregoing proviso. During the occurrence and continuance of an Event of Default,
no downward adjustment, and only upward adjustments, shall be made to the Unused
Fee Rate.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require,
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pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and the neuter. Except as otherwise herein specifically
provided, each accounting term used herein shall have the meaning given to it
under Generally Accepted Accounting Principles. The term "including" shall not
be limited or exclusive, unless specifically indicated to the contrary. The word
"will" shall be construed to have the same meaning in effect as the word
"shall". The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including the exhibits and schedules
hereto, all of which are by this reference incorporated into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. Revolving Credit Loans. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, the Lender agrees to make loans (individually a "Revolving Credit Loan"
and, collectively, the "Revolving Credit Loans") to the Company from time to
time during the Revolving Credit Commitment Period up to but not exceeding at
any one time outstanding the amount of its Revolving Credit Commitment;
provided, however, that no Revolving Credit Loan shall be made if, after giving
effect to such Revolving Credit Loan, the Aggregate Outstandings would exceed
the Revolving Credit Commitment in effect at such time. During the Revolving
Credit Commitment Period, the Company may from time to time borrow, repay and
reborrow hereunder on or after the date hereof and prior to the Revolving Credit
Commitment Termination Date, subject to the terms, provisions and limitations
set forth herein. The Revolving Credit Loans may be (i) Adjusted Libor Loans,
(ii) Alternate Base Rate Loans or (iii) a combination thereof.
(b) The Company shall give the Lender irrevocable written notice (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m., New
York, New York time, three Business Days prior to the date of each proposed
Adjusted Libor Loan under this Section 2.01 or prior to 11:00 a.m. New York, New
York time on the date of each proposed Alternate Base Rate Loan under this
Section 2.01. Such notice shall be irrevocable and shall specify (i) the amount
and Type of the proposed borrowing, (ii) the proposed use of the loan proceeds,
(iii) the initial Interest Period if an Adjusted Libor Loan, and (iv) the
proposed Borrowing Date. Except for borrowings which utilize the full remaining
amount of the Revolving Credit Commitment, each borrowing of an Alternate Base
Rate Loan shall be in an amount not less than $100,000 or, if greater, whole
multiples of $100,000 in excess thereof. Each borrowing of an Adjusted Libor
Loan shall be an amount not less than $500,000 or whole multiples of $100,000 in
excess thereof. Funding of all Loans shall be made in accordance with Section
3.11 of this Agreement.
(c) The Company shall have the right, upon not less than three
Business Days' prior written notice to the Lender to terminate the Revolving
Credit Commitment or from time to time to permanently reduce the amount of the
Revolving Credit Commitment; provided, however, that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the Aggregate Outstandings would exceed the Revolving Credit Commitment as then
reduced; provided, further, that any such termination or reduction requiring
prepayment of any Adjusted
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Libor Loan shall be made only on the last day of the Interest Period with
respect thereto or on the date of payment in full of all amounts owing pursuant
to Section 3.08 as a result of such termination or reduction. Any such reduction
shall be in the amount of $500,000 or whole multiples of $100,000 in excess
thereof, and shall reduce permanently the amount of the Revolving Credit
Commitment then in effect.
(d) The agreement of the Lender to make Revolving Credit Loans
pursuant to this Section 2.01 shall automatically terminate on the Revolving
Credit Commitment Termination Date. Upon such termination, the Company shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.
SECTION 2.02. Revolving Credit Note. The Revolving Credit Loans made by
the Lender shall be evidenced by a promissory note of the Company (the
"Revolving Credit Note"), substantially in the form attached hereto as Exhibit
A, appropriately completed, duly executed and delivered on behalf of the Company
and payable to the order of the Lender in a principal amount equal to the
Revolving Credit Commitment of the Lender. The Revolving Credit Note shall (a)
be dated the Closing Date, (b) be stated to mature on the Revolving Credit
Commitment Termination Date, and (c) bear interest from the date thereof until
paid in full on the unpaid principal amount thereof from time to time
outstanding as provided in Section 3.01. The Lender is authorized to record the
date, Type and amount of each Revolving Credit Loan and the date and amount of
each payment or prepayment of principal of each Revolving Credit Loan in the
Lender's records or on the grid schedule annexed to the Revolving Credit Note;
provided, however, that the failure of the Lender to set forth each such
Revolving Credit Loan, payment and other information shall not in any manner
affect the obligation of the Company to repay each Revolving Credit Loan made by
the Lender in accordance with the terms of its Revolving Credit Note and this
Agreement. The Revolving Credit Note, the grid schedule and the books and
records of the Lender shall constitute presumptive evidence of the information
so recorded absent manifest error.
SECTION 2.03. Term Loan A. On the Prior Closing Date, the Lender made a
term loan ("Term Loan A") to the Company in an amount equal to the Term Loan A
Commitment, the outstanding principal amount of which is $1,466,654 as of the
Closing Date. Term Loan A shall be a Fixed Rate Loan. The Term Loan A Commitment
terminated upon funding of the Term Loan A on the Prior Closing Date.
SECTION 2.04. Term Note A. Term Loan A made by the Lender shall be
evidenced by an amended and restated promissory note of the Company,
substantially in the form of Exhibit B, with appropriate insertions ("Term Note
A") payable to the order of the Lender and representing the obligation of the
Company to pay the unpaid principal amount of Term Loan A to the Lender with
interest thereon as prescribed in Section 3.01. The Lender is authorized to
record the Type and the date and amount of each payment or prepayment of
principal thereof in the Lender's records or on the grid schedule annexed to
Term Note A; provided, however, that the failure of the Lender to set forth each
payment and other information shall not in any manner affect the obligation of
the Company to repay Term Loan A in
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accordance with the terms of the Term Note A and this Agreement. Term Note A,
the grid schedule and the books and records of the Lender shall constitute
presumptive evidence of the information so recorded absent manifest error. Term
Note A shall (a) be dated the Closing Date, (b) be stated to mature on the Term
Loan A Maturity Date and (c) be payable as to principal in 22 consecutive
monthly installments of $66,667 commencing September 30, 2002, provided that the
final installment on the Term Loan A Maturity Date shall be in an amount equal
to the remaining principal amount outstanding on the Term Loan A Maturity Date.
Repayments and prepayments of Term Loan A may not be reborrowed. Term Note A
shall bear interest from the date thereof until paid in full on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as specified in,
Section 3.01.
SECTION 2.05. Term Loan B. Subject to the terms and conditions hereof, the
Lender agrees to make a term loan ("Term Loan B") to the Company on the Closing
Date in an amount not to exceed the Term Loan B Commitment. The Company shall
give the Lender irrevocable written notice (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time on the
Closing Date specifying the amount to be borrowed, which amount shall equal the
Term Loan B Commitment. Term Loan B may, at the election of the Company, consist
of (i) Adjusted Libor Loans, (ii) Alternate Base Rate Loans, (iii) a combination
of Adjusted Libor Loans and Alternate Base Rate Loan or (iv) subject to Section
3.01(i), a Fixed Rate Loan. Any portion of Term Loan B consisting of an Adjusted
Libor Loan shall be in the minimum principal amount of $500,000 or whole
multiples of $100,000 in excess thereof. The Term Loan B Commitment shall
terminate upon funding of Term Loan B on the Closing Date.
SECTION 2.06. Term Note B. Term Loan B made by the Lender shall be
evidenced by a promissory note of the Company, substantially in the form of
Exhibit C, with appropriate insertions ("Term Note B") payable to the order of
the Lender and representing the obligation of the Company to pay the unpaid
principal amount of Term Loan B of the Lender with interest thereon as
prescribed in Section 3.01. The Lender is authorized to record the Type and the
date and amount of each payment or prepayment of principal thereof in the
Lender's records or on the grid schedule annexed to Term Note B; provided,
however, that the failure of the Lender to set forth each payment and other
information shall not in any manner affect the obligation of the Company to
repay Term Loan B in accordance with the terms of Term Note B and this
Agreement. Term Note B, the grid schedule and the books and records of the
Lender shall constitute presumptive evidence of the information so recorded
absent manifest error. Term Note B shall (a) be dated the Closing Date, (b) be
stated to mature on the Term Loan B Maturity Date and (c) be payable as to
principal in sixty consecutive monthly installments of $33,883 commencing
September 30, 2002, provided that the final installment on the Term Loan B
Maturity Date shall be in an amount equal to the remaining principal amount
outstanding on the Term Loan B Maturity Date. Repayments and prepayments of Term
Loan B may not be reborrowed. Term Note B shall bear interest from the date
thereof until paid in full on the unpaid principal amount thereof from time to
time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 3.01.
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ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans.
(a) Each Alternate Base Rate Loan shall bear interest for the period
from the date thereof on the unpaid principal amount thereof at a fluctuating
rate per annum equal to the Alternate Base Rate plus the applicable Interest
Rate Margin.
(b) Each Adjusted Libor Loan shall bear interest for the Interest
Period applicable thereto on the unpaid principal amount thereof at a rate per
annum equal to the Reserve Adjusted Libor determined for each Interest Period
thereof in accordance with the terms hereof plus the applicable Interest Rate
Margin.
(c) Each Fixed Rate Loan shall bear interest for the period from the
date thereof on the unpaid principal amount thereof at a fixed rate per annum
equal to (i) the applicable Fixed Rate plus the Applicable Fixed Rate Margin,
with respect to Term Loan A and (ii) the applicable Fixed Rate, with respect to
Term Loan B.
(d) Upon the occurrence and during the continuance of an Event of
Default the outstanding principal amount of the Loans (excluding any defaulted
payment of principal accruing interest in accordance with clause (e) below),
shall, at the option of the Lender, bear interest payable on demand at a rate of
interest 2% per annum in excess of the interest rate otherwise then in effect.
(e) If the Company shall default in the payment of the principal of
or interest on any portion of any Loan or any other amount becoming due
hereunder, whether interest, fees, expenses or otherwise, the Company shall pay
interest on such defaulted amount accruing from the date of such default
(without reference to any period of grace) up to and including the date of
actual payment (after as well as before judgment) at a rate of 2% per annum in
excess of the rate otherwise in effect or, if no rate is in effect, 2% per annum
in excess of the Alternate Base Rate.
(f) The Company may elect from time to time to convert outstanding
Loans from Adjusted Libor Loans to Alternate Base Rate Loans by giving the
Lender at least three Business Day's prior irrevocable written notice of such
election, provided that any such conversion of Adjusted Libor Loans shall only
be made on the last day of an Interest Period with respect thereto or upon the
date of payment in full of any amounts owing pursuant to Section 3.08 as a
result of such conversion. The Company may elect from time to time to convert
outstanding Loans from Alternate Base Rate Loans to Adjusted Libor Loans by
giving the Lender irrevocable written notice of such election not later than
11:00 a.m. New York, New York time, three Business Days prior to the date of the
proposed conversion. All or any part of outstanding Alternate Base Rate Loans
may be converted as provided herein, provided that each conversion shall be in
the principal amount of $500,000 or whole multiples of $100,000 in excess
thereof, and further provided that no Event of Default shall have occurred and
be
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continuing. Any conversion to or from Adjusted Libor Loans hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of each Adjusted Libor Loan having the
same Interest Period shall not be less than $500,000.
(g) Any Adjusted Libor Loan in a minimum principal amount of
$500,000 may be continued as such upon the expiration of an Interest Period with
respect thereto by compliance by the Company with the notice provisions
contained in the definition of Interest Period; provided, that no Adjusted Libor
Loan may be continued as such when any Event of Default has occurred and is
continuing, but shall be automatically converted to an Alternate Base Rate Loan
on the last day of the Interest Period in effect when the Lender is notified, or
otherwise has actual knowledge, of such Event of Default.
(h) If the Company shall fail to select the duration of any Interest
Period for any Adjusted Libor Loan in accordance with the definition of
"Interest Period" set forth in Section 1.01, the Company shall be deemed to have
selected an Interest Period of one month.
(i) The Company may elect, at any time during the Exercise Period,
to have the full outstanding principal amount of Term Loan B be a Fixed Rate
Loan, subject to availability thereof as set forth in the definition thereof, by
giving the Lender prior irrevocable written notice of such election not later
than 11:00 a.m., New York, New York time on the date of the proposed conversion;
provided, however, (i) no conversion may be requested or funded if a Default or
an Event of Default shall have occurred and be continuing and (ii) no Adjusted
Libor Loan may be converted to a Fixed Rate Loan unless the date of the
conversion is the last day of the Interest Period applicable to such Adjusted
Libor Loan.
(j) No Loan may be converted to or continued as an Adjusted Libor
Loan with an Interest Period that extends beyond (i) the Revolving Credit
Commitment Termination Date, with respect to Revolving Credit Loans, or (ii) the
Term Loan B Maturity Date with respect to Term Loan B, if applicable. No Fixed
Rate Loan can be converted at the request of the Company to a Term Loan of
another Type.
(k) Anything in this Agreement or in any Note to the contrary
notwithstanding, the obligation of the Company to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be paid to the Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting the rates of interest that may be charged or collected by the Lender.
In each such event payments of interest required to be paid to the Lender shall
be calculated at the highest rate permitted by applicable law until such time as
the rates of interest required hereunder may lawfully be charged and collected
by the Lender. If the provisions of this Agreement or any Note would at any time
otherwise require payment by the Company to the Lender of any amount of interest
in excess of the maximum amount then permitted by applicable law, the interest
payments to the Lender shall be reduced to the extent necessary so that the
Lender shall not receive interest in excess of such maximum amount. To the
extent that, pursuant to the foregoing sentence, the Lender shall receive
interest payments hereunder or under
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any Note in an amount less than the amount otherwise provided herein or in any
Note, such deficit (hereinafter called the "Interest Deficit") will accumulate
and will be carried forward (without interest) until the termination of this
Agreement. Interest otherwise payable to the Lender hereunder and under such
Note for any subsequent period shall be increased by such maximum amount of the
Interest Deficit that may be so added without causing the Lender to receive
interest in excess of the maximum amount then permitted by applicable law. The
amount of the Interest Deficit relating to any Note at the time of complete
payment of such Note and termination of the Commitments shall be cancelled and
not paid.
(l) Interest on each Loan shall be payable in arrears on each
Interest Payment Date and shall be calculated on the basis year of 360 days and
shall be payable for the actual days elapsed. Any rate of interest on the Loans
or other Obligations which is computed on the basis of the Alternate Base Rate
shall change when and as the Alternate Base Rate changes in accordance with the
definition thereof. Each determination by the Lender of an interest rate or fee
hereunder shall, absent manifest error, be conclusive and binding for all
purposes.
SECTION 3.02. Use of Proceeds. Term Loan A was funded pursuant to the
Prior Credit Agreement for the purposes stated therein. Term Loan B shall be
used solely to pay, in part, the Existing Indebtedness on the Closing Date. The
proceeds of the Revolving Credit Loans shall be used solely (i) to pay the
remaining portion of the Existing Indebtedness, after giving effect to the
funding of Term Loan B on the Closing Date, (ii) for working capital purposes of
the Company, and (iii) to fund loans and investments in Affiliates permitted
pursuant to Section 7.06(b) and 7.06(c).
SECTION 3.03. Prepayments.
(a) The Company shall have the right at any time and from time to
time to prepay any Alternate Base Rate Loan in whole or in part, without premium
or penalty, upon the written notice to the Lender (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time on the
Business Day of the proposed date of prepayment. The Company shall also have the
right at any time and from time to time to prepay any Fixed Rate Loan or
Adjusted Libor Loan, in whole or in part, without premium or penalty, (except as
provided in Section 3.08 hereof) upon written notice to the Lender (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m. New
York, New York time, three Business Days before the date of prepayment. Each
notice shall be irrevocable and shall specify the Loan to be prepaid, the date
and amount of prepayment and whether such prepayment is of Adjusted Libor Loans,
Fixed Rate Loans or Alternate Base Rate Loans or a combination thereof, and if a
combination thereof, the amount of prepayment allocable to each. If such notice
is given, the Company shall make such prepayment, and the amount specified in
such notice shall be due and payable, on the date specified therein. Each
partial prepayment pursuant to this Section 3.03 shall be in a principal amount
of $500,000 or whole multiples of $100,000 in excess thereof with respect to any
Fixed Rate Loan or Adjusted Libor Loan, and in a principal amount of $100,000 or
whole multiples of $100,000 in excess thereof with respect to any Alternate Base
Rate Loan.
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(b) Each prepayment of principal of a Loan pursuant to this Section
3.03 shall be accompanied by accrued interest to the date prepaid on the amount
prepaid. All partial prepayments of any Term Loan, shall be applied to the
remaining installments of principal thereof in inverse order of maturity.
Prepayments of any Term Loan may not be reborrowed. Unless otherwise directed by
the Company pursuant to Section 3.03(a), partial prepayments of any Loan (other
than prepayments of any Term Loan accruing interest at the Fixed Rate) shall be
applied first to outstanding Alternate Base Rate Loans and then to Adjusted
Libor Loans having the shortest remaining Interest Periods.
SECTION 3.04. Fees.
(a) The Company agrees to pay to the Lender a commitment fee on the
average daily unused portion of the Revolving Credit Commitment from the date of
this Agreement until the Revolving Credit Commitment Termination Date at a rate
per annum equal to the Unused Fee Rate, based on a year of 360 days, payable
quarterly in arrears on the first day of July, October, January and April of
each year commencing October 1, 2002, on the Revolving Credit Commitment
Termination Date, and on each date the Revolving Credit Commitment is
permanently reduced in whole or in part.
(b) The Company agrees to pay to the Lender a non-refundable
structuring fee of $42,500, $21,250 of which the Lender acknowledges it received
prior to the date hereof, and $21,250 of which shall be paid in full on the
Closing Date.
SECTION 3.05. Inability to Determine Interest Rate. In the event that the
Lender shall have determined (which determination shall be conclusive and
binding upon the Company) that, by reason of circumstances affecting the London
interbank market, adequate and reasonable means do not exist for ascertaining
the Reserve Adjusted Libor applicable pursuant to Section 3.01(b) for any
requested Interest Period with respect to (a) the making of an Adjusted Libor
Loan, (b) an Adjusted Libor Loan that will result from the requested conversion
of an Alternate Base Rate Loan into an Adjusted Libor Loan, or (c) the
continuation of an Adjusted Libor Loan beyond the expiration of the then current
Interest Period with respect thereto, the Lender shall forthwith give notice by
telephone of such determination, promptly confirmed in writing, to the Company
of such determination. Until the Lender notifies the Company that the
circumstances giving rise to the suspension described herein no longer exist,
the Company shall not have the right to request or continue an Adjusted Libor
Loan or to convert an Alternate Base Rate Loan to an Adjusted Libor Loan.
SECTION 3.06. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof shall make it unlawful for the Lender
to make or maintain a Fixed Rate Loan or Adjusted Libor Loans as contemplated by
this Agreement, the Lender shall forthwith give notice by telephone of such
circumstances, promptly confirmed in writing, and (a) the commitment of the
Lender to make and to allow conversion to or continuations of Adjusted Libor
Loans or conversion to a Fixed Rate Loan shall forthwith be cancelled for the
duration of such illegality and (b) the Loans then outstanding as Adjusted Libor
Loans or a Fixed Rate Loan,
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as applicable, if any, shall be converted automatically to Alternate Base Rate
Loans on the next succeeding last day of each Interest Period applicable to any
Adjusted Libor Loan or, with respect to any Adjusted Libor Loan or Fixed Rate
Loan, within such earlier period as may be required by law. The Company shall
pay to the Lender, upon demand, any additional amounts required to be paid
pursuant to Section 3.08 hereof.
SECTION 3.07. Increased Costs. (a) In the event that any introduction of
or change in any applicable law, regulation, treaty, order, directive or in the
interpretation or application thereof (including, without limitation, any
request, guideline or policy, whether or not having the force of law, of or from
any central bank or other governmental authority, agency or instrumentality and
including, without limitation, Regulation D), by any authority charged with the
administration or interpretation thereof shall occur, which:
(i) shall subject the Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, or any Loan, or change the basis of
taxation of payments to the Lender of principal, interest, fees or any
other amount payable hereunder (other than any tax that is measured with
respect to the overall net income of the Lender or lending office of the
Lender and that is imposed by the United States of America, or any
political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which the Lender's lending office is located, or by any
jurisdiction in which the Lender is organized, has its principal office or
is managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement (whether or not having the
force of law) against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of the Lender; or
(iii) shall impose on the Lender any other condition, or change
therein;
and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing or maintaining or participating in advances or extensions of
credit hereunder or to reduce any amount receivable hereunder, in each case by
an amount which the Lender deems material, then, in any such case, the Company
shall pay the Lender, upon demand, such additional amount or amounts as the
Lender shall have determined will compensate the Lender for such increased costs
or reduction.
(b) If the Lender shall have determined that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender (or any
lending office of the Lender) or the Lender's holding company, with any request
or directive regarding capital adequacy (whether or not having the force of the
law) of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the Lender's capital or on the
capital of the Lender's holding company as a
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consequence of its obligations hereunder to a level below that which the Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the Lender's policies and the policies of the Lender's holding
company with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time, the Company shall pay to the Lender, the
additional amount or amounts as the Lender shall have determined will compensate
the Lender or the Lender's holding company for such reduction. The Lender's
determination of such amounts shall be conclusive and binding on the Company
absent manifest error.
(c) A certificate of the Lender setting forth the amount or amounts
payable pursuant to Sections 3.07(a) and 3.07(b) above shall be conclusive
absent manifest error. The Company shall pay the Lender the amount shown as due
on any such certificate within five days after receipt thereof.
(d) In the event the Lender shall be entitled to compensation
pursuant to Section 3.07(a) or Section 3.07(b), it shall promptly notify the
Company of the event by reason of which it has become so entitled; provided,
however, no failure on the part of the Lender to demand compensation under
clause (a) or clause (b) above on one occasion shall constitute a waiver of its
right to demand compensation on any other occasion.
SECTION 3.08. Indemnity. The Company agrees to indemnify the Lender and to
hold the Lender harmless from any loss, cost or expense which the Lender may
sustain or incur, including, without limitation, interest or fees payable by the
Lender to lenders of funds obtained by it in order to make or maintain Adjusted
Libor Loans hereunder, as a consequence of (a) default by the Company in payment
of the principal amount of or interest on any Adjusted Libor Loan, (b) default
by the Company to accept or make a borrowing of an Adjusted Libor Loan or a
conversion into or continuation of an Adjusted Libor Loan after the Company has
requested such borrowing, conversion or continuation, (c) default by the Company
in making any prepayment of any Adjusted Libor Loan after the Company gives a
notice in accordance with Section 3.03 of this Agreement and/or (d) the making
of any payment or prepayment (whether mandatory or optional) of an Adjusted
Libor Loan or the making of any conversion of an Adjusted Libor Loan to an
Alternate Base Rate Loan on a day which is not the last day of the applicable
Interest Period with respect thereto. The Company further agrees to indemnify
the Lender and to hold the Lender harmless from any Consequential Loss and any
other loss, cost or expense, including, without limitation, interest or fees
payable by the Lender to lenders of funds obtained by it in order to make or
maintain Fixed Rate Loan hereunder, which the Lender may sustain or incur as a
consequence of (a) default by the Company in payment of the principal amount of
or interest on any Fixed Rate Loan, (b) default by the Company to accept or make
a borrowing of a Fixed Rate Loan or a conversion into a Fixed Rate Loan after
the Company has requested such borrowing or conversion, (c) default by the
Company in making any prepayment of any Fixed Rate Loan after the Company gives
notice in accordance with Section 3.03 of this Agreement and/or (d) the making
of any payment or prepayment (whether mandatory or optional), except in
accordance with the payment schedule set forth in the Term Notes, of any Fixed
Rate Loan on a day other than the Term Loan A Maturity Date, with respect to
Term Loan A or the Term Loan B Maturity Date, with respect to Term Loan B. A
certificate of the Lender setting forth such
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amounts shall be conclusive absent manifest error. The Company shall pay the
Lender the amount shown as due on any certificate within five days after receipt
thereof.
SECTION 3.09. Taxes. All payments made by the Company under this Agreement
shall be made free and clear of, and without reduction for or on account of, any
present or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income and franchise taxes imposed on
the Lender by (i) the United States of America or any political subdivision or
taxing authority thereof or therein, (ii) the jurisdiction under the laws of
which the Lender is organized or in which it has its principal office or is
managed and controlled or any political subdivision or taxing authority thereof
or therein, or (iii) any jurisdiction in which the Lender's lending office is
located or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes being called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Lender hereunder, or under the Notes,
the amount so payable to the Lender shall be increased to the extent necessary
to yield to the Lender (after payment of all Taxes and free and clear of all
liability in respect of such Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Company, the Company shall promptly
send to the Lender, a certified copy of an original official receipt showing
payment thereof. If the Company fails to pay Taxes when due to the appropriate
taxing authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Company shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure together with any expenses payable by the Lender
in connection therewith.
SECTION 3.10. Payments. All payments (including prepayments) to be made by
the Company on account of principal, interest, fees and reimbursement
obligations shall be made without set-off or counterclaim and shall be made to
the Lender, at the Payment Office of the Lender in Dollars in immediately
available funds. The Lender may, in its sole discretion, directly charge
principal and interest payments due in respect of the Loans to the Company's
accounts at the Payment Office or other office of the Lender. Except as
otherwise provided in the definition of "Interest Period", if any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
SECTION 3.11. Disbursement of Loans. The Lender shall make each Loan to be
made by it hereunder available to the Company at the Payment Office by crediting
the account of the Company with such amount and in like funds; provided,
however, that if the proceeds of any Loan or any portion thereof are to be used
to prepay outstanding Loans, then the Lender shall apply such proceeds for such
purpose to the extent necessary and credit the balance, if any, to the Company's
account.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to extend
the credit herein provided for, the Company represents and warrants to the
Lender that:
SECTION 4.01. Organization, Powers. The Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (b) has the corporate power and authority to own its properties and to
carry on its business as now being conducted, (c) is duly qualified to do
business in every jurisdiction wherein the conduct of its business or the
ownership of its properties are such as to require such qualification except
those jurisdictions in which the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect, and (d) has the corporate power
to execute, deliver and perform each of the Loan Documents to which it is a
party, including, without limitation, the power to obtain extensions of credit
hereunder and to execute and deliver the Notes. Each Subsidiary (a) is a
corporation, limited liability company or limited partnership duly organized,
validity existing and in good standing under the laws of its jurisdiction of
incorporation or formation, (b) has the requisite power and authority to own its
properties and to carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification except those jurisdictions in which the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect, and (d) to
the extent such Subsidiary is a Guarantor, has the requisite power to execute,
deliver and perform each of the Loan Documents to which it is a party.
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations. The
execution, delivery and performance by the Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings and the other
extensions of credit to the Company hereunder and the execution, delivery and
performance by each Guarantor of each Loan Document to which it is a party (a)
have been duly authorized by all requisite action, (b) will not violate or
require any consent (other than consents as have been made or obtained and which
are in full force and effect) under (i) any provision of law applicable to the
Company or any Guarantor, any rule or regulation of any Governmental Authority,
or the Certificate of Incorporation or By-laws of the Company or the Certificate
of Incorporation or By-laws (or other organizational documents) of any Guarantor
or (ii) any order of any court or other Governmental Authority binding on the
Company or any Guarantor or any indenture, agreement or other instrument to
which the Company or any Guarantor is a party, or by which the Company or any
Guarantor or any of its property is bound, and (c) will not be in conflict with,
result in a breach of or constitute (with due notice and/or lapse of time) a
default under, any such indenture, agreement or other instrument, or result in
the creation or imposition of any Lien, of any nature whatsoever upon any of the
property or assets of the Company or any Guarantor other than as contemplated by
this Agreement or the other Loan Documents. This Agreement and each other Loan
Document to which the Company or any Guarantor is a party constitutes a legal,
valid and binding obligation of the Company and each Guarantor, as the case may
be, enforceable against the Company and each Guarantor in accordance with its
terms except to the extent that enforcement may be limited by applicable
bankruptcy, reorganization, moratorium, insolvency
-28-
and similar laws affecting creditors' rights generally or by equitable
principles of general application, regardless of whether considered in a
proceeding in equity or at law.
SECTION 4.03. Financial Condition. (a) The Company has heretofore
furnished to the Lender (i) the audited consolidated balance sheet of the
Company and its consolidated Subsidiaries and the related consolidated
statements of income, retained earnings and cash flow of the Company and its
consolidated Subsidiaries, audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, independent
certified public accountants, for the fiscal year ended September 30, 2001 and
(ii) the unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries and the related consolidated statements of income,
retained earnings and cash flow of the Company and its consolidated Subsidiaries
for the nine month period ended June 30, 2002. Such financial statements were
prepared in conformity with Generally Accepted Accounting Principles, applied on
a consistent basis, and fairly present the financial condition and the results
of operations of the Company and its consolidated Subsidiaries as of the date of
such financial statements and for the periods to which they relate and since
September 30, 2001, no Material Adverse Effect has occurred. The Company shall
deliver to the Lender, a certificate of the Chief Financial Officer of the
Company to that effect on the Closing Date. Other than obligations and
liabilities arising in the ordinary course of business since September 30, 2001,
there are no obligations or liabilities contingent or otherwise, of the Company
or any of its consolidated Subsidiaries which are not reflected or disclosed on
such audited statements other than obligations of the Company and of its
consolidated Subsidiaries incurred in the ordinary course of business (which
shall be deemed to exclude acquisitions by the Company or any consolidated
Subsidiary of the business or assets (including, without limitation, stock) of
any Person).
(b) The Company, individually, and together with its consolidated
Subsidiaries, is Solvent and immediately after giving effect to each Loan and
each other extension of credit contemplated by this Agreement and the execution
of each Loan Document, will be Solvent.
SECTION 4.04. Taxes. All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of the Company
and each of its Subsidiaries have been discharged or reserved against in
accordance with Generally Accepted Accounting Principles. The Company and each
of its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed, and has paid or has caused to be
paid all taxes as shown on said returns or on any assessment received by them,
to the extent that such taxes have become due, except taxes which are being
contested in good faith and which are reserved against in accordance with
Generally Accepted Accounting Principles.
SECTION 4.05. Title to Properties. The Company and each of its
Subsidiaries has good title to its properties and assets reflected on the
financial statements referred to in Section 4.03 hereof, except for such
properties and assets as have been disposed of since the date of such financial
statements as no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business, and
all such properties and assets of the Company and each Guarantor are free and
clear of all Liens other than Permitted Liens.
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SECTION 4.06. Litigation. (a) There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company or any of its Subsidiaries)
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries at law or in equity or before or by any
Governmental Authority, which involve any of the transactions contemplated
herein or which, if adversely determined against the Company or any of its
Subsidiaries, could reasonably be expected to result in a Material Adverse
Effect; and (b) neither the Company nor any Subsidiary is in default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
Governmental Authority which could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.07. Agreements. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
regulation which could reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. Compliance with ERISA. Each Plan is in compliance with
ERISA; no Plan is insolvent or in reorganization, no Plan or Plans have an
Unfunded Current Liability, and no Plan has an accumulated or waived funding
deficiency; neither the Company nor any ERISA Affiliate nor any Subsidiary has
incurred any liability to or on account of a Plan pursuant to Section 515, 4062,
4063, 4064, 4201 or 4204 of ERISA or reasonably expects to incur any liability
under any of the foregoing sections on account of the prior termination of
participation in or contributions to any such Plan; no proceedings have been
instituted to terminate any Plan; no condition exists which could reasonably be
expected to present a risk to the Company, any Subsidiary or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no lien imposed under the Code or ERISA on the
assets of the Company, any Subsidiary or any of its ERISA Affiliates exists or
to the knowledge of the Company is likely to arise on account of any Plan and
the Company and each Subsidiary may terminate contributions to any other
employee benefit plans maintained by it without incurring any material liability
to any Person interested therein.
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds. (a) Neither
the Company nor any of its Subsidiaries is engaged principally in, nor has as
one of its important activities, the business of extending credit for the
purpose of purchasing or carrying any "margin stock" (as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System of the
United States, as amended from time to time).
(b) No part of the proceeds of any Loan and no other extension of
credit hereunder will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) to extend credit to others for the
purpose of purchasing or carrying margin stock, or (ii) for any purpose which
violates or is inconsistent with the provisions of Regulation T,U, or X of the
Board of Governors of the Federal Reserve System.
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(c) The proceeds of each Loan, and each other extension of credit
hereunder shall be used solely for the purposes permitted under Section 3.02.
(d) At the time of the incurrence of the Existing Indebtedness and
at all times thereafter until the repayment of such Existing Indebtedness, and
after giving effect to the payment in full of the Existing Indebtedness on the
Closing Date and to the making of each Loan hereunder, not more than 25% of the
value of the assets of the Company as determined by any reasonable method were,
are or will be margin securities (as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System, as amended, from time to
time).
SECTION 4.10. Approvals. No registration with or consent or approval of,
or other action by, any Governmental Authority or any other Person is required
in connection with the execution, delivery and performance of this Agreement by
the Company or any Guarantor, or with the execution and delivery of other Loan
Documents to which it is a party or with respect to the Company, the borrowings
hereunder other than registrations, consents or approvals which have been made
or obtained and which are in full force and effect.
SECTION 4.11. Subsidiaries and Direct Affiliates. Attached hereto as
Schedule V is a correct and complete list of each of the Company's Subsidiaries
as of the Closing Date showing as to each Subsidiary, its name, the jurisdiction
of its incorporation, its shareholders or other owners of an interest in each
Subsidiary and the number of outstanding shares or other ownership interest
owned by each shareholder or other owner of an interest. The Subsidiaries
asterisked on Schedule V are those Subsidiaries which are Foreign Subsidiaries.
Schedule V also sets forth a correct and complete list of each of the Company's
Existing Direct Affiliates which are not Subsidiaries of the Company showing as
to each such Direct Affiliate, its name, the jurisdiction of its incorporation,
its shareholders or other owners of an interest in such Direct Affiliate and the
number of outstanding shares or other ownership interests owned by each
shareholder or other owner of an interest. The Direct Affiliates asterisked on
Schedule V are those Direct Affiliates which are not incorporated under the laws
of any state or territory of the United States of America.
SECTION 4.12. Hazardous Materials. The Company and each of its
Subsidiaries is in compliance in all material respects with all applicable
Environmental Laws and neither the Company nor any of its Subsidiaries has used
Hazardous Materials on, from, or affecting any property now owned or occupied or
hereafter owned or occupied by the Company or any of its Subsidiaries in any
manner which violates any applicable Environmental Law. No prior owner of any
such property or any tenant, subtenant, prior tenant or prior subtenant have
used Hazardous Materials on, from, or affecting such property in any manner
which violates any applicable Environmental Law.
SECTION 4.13. Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
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SECTION 4.14. No Default. No Default or Event of Default has occurred and
is continuing.
SECTION 4.15. Material Contracts. All Material Contracts are disclosed on
Schedule IV hereto. Each such Material Contract is in full force and effect and
is binding upon and enforceable against the Company and each of its
Subsidiaries, in each case, to the extent they are a party thereto, and, to the
Company's knowledge, all other parties thereto in accordance with its terms, and
there exists no default, in any material respect, under any Material Contract by
the Company or any of its Subsidiaries or by any other party thereto which has
not been fully cured or waived.
SECTION 4.16. Permits and Licenses. The Company and each of its
Subsidiaries has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except those the failure of which to have could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.17. Compliance with Law. The Company and each of its
Subsidiaries is in compliance, with all laws, rules, regulations, orders and
decrees which are applicable to the Company, or to any of its properties, which
the failure to comply with could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
SECTION 4.18. Disclosure. Neither this Agreement, any other Loan Document,
nor any other document, certificate or written statement furnished to the Lender
by or on behalf of the Company or any of its Subsidiaries for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which they were made.
SECTION 4.19. Security Documents. The Security Documents executed by the
Company and each of its Domestic Subsidiaries shall constitute a valid and
continuing lien on and security interest in the collateral referred to in such
Security Document in favor of the Lender, which shall be prior to all other
Liens, claims and rights of all other persons.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. Conditions to Initial Extension of Credit. The obligation of
the Lender to make the initial Loan hereunder is subject to the following
conditions precedent:
(a) Notes. On or prior to the Closing Date, the Lender shall have
received the Revolving Credit Note and the Term Notes, each duly executed by the
Company.
(b) Guaranties. On or prior to the Closing Date, the Lender shall
have received an Unlimited Corporate Guaranty duly executed by each direct or
indirect wholly-
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owned Domestic Subsidiary of the Company and a Limited Corporate Guaranty from
each other Domestic Subsidiary of the Company.
(c) Security Agreement; Financing Statements. On or prior to the
Closing Date, the Lender shall have received the Security Agreement, duly
executed by the Company and the Guarantors, as applicable, with duly prepared
UCC financing statements describing the collateral covered by the Security
Agreement.
(d) Amendment and Reaffirmation of Pledge Agreements. On or prior to
the Closing Date, the Lender shall have received amendment and reaffirmation of
pledge agreement in form and substance satisfactory to the Lender of the Pledge
Agreement executed by the Company in favor of the Lender pursuant to the Prior
Credit Agreement with respect to 65% of the issued and outstanding shares of
Global Payment Technologies (Europe) Limited.
(e) Opinion of Counsel. On or prior to the Closing Date, the Lender
shall have received written opinions of (i) counsel for the Company and the
Guarantors dated the Closing Date and addressed to the Lender, substantially in
the form of Exhibit H attached hereto, and (ii) local counsel to Global Payment
Technologies (Europe) Limited and Global Payment Technologies Australia Pty.
Ltd. opining as to the enforceability of the Notice of Acknowledgment and
Assignment executed by such entities.
(f) Supporting Documents. On or prior to the Closing Date, the
Lender shall have received (i) a certificate of good standing for the Company
and each of its Subsidiaries from the secretary of state of the state of its
organizational jurisdiction dated as of a recent date; (ii) certified copies of
the Certificate of Incorporation and By-laws of the Company and each of its
Subsidiaries; (iii) a certificate of the Secretary or an Assistant Secretary of
the Company and each of its Subsidiaries which is a Guarantor dated the Closing
Date and certifying: (x) that neither the Certificates of Incorporation nor the
By-laws of the Company and each of its Subsidiaries has been amended since the
date of their certification (or if there has been any such amendment, attaching
a certified copy thereof); (y) with respect to the Company and each Subsidiary
which is a Guarantor, that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of the Company or Guarantor, as
the case may be, authorizing the execution, delivery and performance of each
Loan Document to which it is a party and the borrowings and other extensions of
credit hereunder; and (z) with respect to the Company and each Subsidiary which
is a Guarantor, the incumbency and specimen signature of each officer of the
Company or Guarantor, as the case may be, executing each Loan Document to which
it is a party and any certificates or instruments furnished pursuant hereto or
thereto, and a certification by another officer of the Company as to the
incumbency and signature of the Secretary or Assistant Secretary of the Company;
and (iv) such other documents as the Lender may reasonably request.
(g) Assets Free from Liens. Prior to the Closing Date, the Lender
shall have received UCC-1 financing statement, tax and judgment lien searches
evidencing that the Company's and each Guarantor's Receivables, inventory,
equipment and all other assets of the
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Company and each Guarantor are free and clear of all Liens except (i) Permitted
Liens and (ii) liens to be satisfied on the Closing Date pursuant to the terms
hereof.
(h) Fees and Expenses. On or prior to the Closing Date, the Lender
shall have received the fees payable on the Closing Date pursuant to Section
3.04(b) and reimbursement of expenses in accordance with Section 9.03(b).
(i) No Litigation. There shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any of its Subsidiaries
pending or, to the knowledge of the Company, threatened before any court,
governmental agency or arbiter that could reasonably be expected to be adversely
determined against the Company or any of its Subsidiaries and, if so adversely
determined, could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(j) Consents and Approvals. All governmental and third party
consents and approvals necessary in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall have been
obtained (without the imposition of any conditions that are not acceptable to
the Lender) and shall remain in effect, and no law or regulation shall be
applicable in the judgment of the Lender that imposes materially adverse
conditions upon the transactions contemplated hereby.
(k) No Material Adverse Changes. There shall not have occurred any
material adverse change in the business, operations, properties, prospects or
condition (financial or otherwise) of the Company or of the Company and its
Subsidiaries, taken as a whole, since September 30, 2001.
(l) Joint Venture Agreements; Shareholder Agreements. Prior to the
Closing Date, the Lender shall have received true, correct and complete copies
of all shareholder agreements, joint venture agreements and all other agreements
governing the rights and obligations of the shareholders in Global Payment
Technologies Holdings (Proprietary) Limited, Global Payment Technologies
Australia Pty. Ltd., Global Payment Technologies (Europe) Limited, Abacus
Financial Management Systems Ltd., Abacus Financial Management Systems Ltd.,
USA, eCash Management Pty., Ltd., Globaltrac LLC and any other Affiliate of the
Company as of the Closing Date, and such agreements shall be in form and
substance satisfactory to the Lender.
(m) Supplier Contracts. Prior to the Closing Date, the Lender shall
have received true, correct and complete copies of all supplier contracts and
agreements, between the Company and any of its Affiliates, and each such
contract and agreement shall be in form and substance satisfactory to the
Lender.
(n) Insurance. On or prior to the Closing Date, the Lender shall
have received a certificate or certificates of insurance from an independent
insurance broker or brokers confirming the insurance required to be maintained
pursuant to Section 6.01 hereof, and
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evidence that the Lender has been named loss payee and additional insured with
respect to each such casualty and liability policy of insurance.
(o) Officer's Certificate. On or prior to the Closing Date, the
Lender shall have received a certificate of a duly authorized officer of the
Company, dated the Closing Date, stating that the representations and warranties
herein and each other Loan Document are true and correct on such date as though
made on and as of such date and no Default or Event of Default has occurred and
is continuing.
(p) Notice and Acknowledgment of Assignment. The Lender shall have
received a Notice and Acknowledgment of Assignment executed by the Company and
Global Payment Technologies Holdings (Proprietary) Limited, Global Payment
Technologies Australia Pty. Ltd., and Global Payment Technologies (Europe)
Limited.
(q) Other Information, Documentation. The Lender shall have received
such other and further information and documentation as it may require,
including, but not limited to, any information or documentation relating to
compliance by the Company with the requirements of all Environmental Laws.
(r) Completion of Proceedings. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by the Loan Documents, shall be satisfactory in form
and substance to the Lender.
SECTION 5.02. Conditions to All Extensions of Credit. The obligation of
the Lender to make each Loan hereunder, including, without limitation, the
initial Loan, are subject to the conditions precedent set forth in Section 5.01
and the following conditions precedent:
(a) Representations and Warranties. The representations and
warranties by the Company and each Guarantor pursuant to this Agreement and the
other Loan Documents to which each is a party shall be true and correct in all
material respects on and as of the Borrowing Date, with the same effect as
though such representations and warranties had been made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on the Borrowing Date or will result after giving effect to
the Loan requested.
(c) Availability. After giving effect to any requested Revolving
Credit Loan, the Aggregate Outstandings shall not exceed the Revolving Credit
Commitment then in effect. Each borrowing hereunder shall constitute a
representation and warranty of the Company that the statements contained in
clauses (a), (b), and (c) of Section 5.02 are true and correct on and as of the
Borrowing Date.
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ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lender that so long as the
Commitments remain in effect, or any of the principal of or interest on the
Notes or any other Obligations hereunder shall be unpaid it will, and will cause
each Guarantor to:
SECTION 6.01. Existence, Properties, Insurance. Do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights and franchises and comply with all laws applicable to it; at
all times maintain, preserve and protect all franchises and trade names and
preserve all of its property, and keep the same in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted in the ordinary course at all times; and at all times
maintain insurance covering its assets and its businesses with financially sound
and reputable insurance companies or associations in such amounts and against
such risks (including, without limitation, hazard, business interruption, public
liability and product liability) as are usually carried by companies engaged in
the same or similar business and such additional insurance as the Lender may
reasonably request within thirty (30) days of such request. Each such policy of
insurance of the Company and the Guarantors shall name the Lender as loss payee
and additional insured and shall provide for at least thirty (30) days' prior
written notice to the Lender of any modification or cancellation of such
policies. The Company shall provide to the Lender promptly upon receipt thereof
evidence of the annual renewal of each such policy.
SECTION 6.02. Payment of Indebtedness and Taxes. (a) Pay all indebtedness
and obligations, now existing or hereafter arising, as and when due and payable,
and (b) pay and discharge or cause to be paid and discharged promptly all taxes,
assessments and government charges or levies imposed upon it or upon its income
and profits, or upon any of its property, real, personal or mixed, or upon any
part thereof, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided,
however, that neither the Company nor any Guarantor shall be required to pay and
discharge or cause to be paid and discharged any such indebtedness or obligation
owing to a vendor in the ordinary course of business, tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings, and the Company or such Guarantor shall have set
aside on its books adequate reserves determined in accordance with Generally
Accepted Accounting Principles with respect to any such indebtedness,
obligation, tax, assessment, charge, levy or claim so contested; further,
provided (i) the aggregate of such indebtedness and obligations so contested
shall not exceed $250,000 at any one time outstanding, and (ii) that, subject to
the foregoing proviso, the Company and each Guarantor shall pay or cause to be
paid all such indebtedness, obligations, taxes, assessments, charges, levies or
claims upon the commencement of proceedings to foreclose any lien which has
attached as security therefor.
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SECTION 6.03. Financial Statements, Reports, etc. Furnish to the Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Company, (i) a copy of the audited consolidated
balance sheet of the Company as of the end of such year and the related audited
consolidated statements of income, shareholders equity and cash flow for such
year, setting forth in comparative form the respective figures as of the end of
and for the previous fiscal year, and accompanied by a report thereon of KPMG
LLP or other independent certified public accountants of recognized standing
selected by the Company and satisfactory to the Lender (the "Auditor"), which
report shall be unqualified and shall be to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with Generally Accepted
Accounting Principles consistently applied, and (ii) a copy of the comparative
consolidating financial statements of the Company and its consolidated
Subsidiaries, prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, which support the financial statements
delivered pursuant to clause (i);
(b) as soon as available, but in any event not later than 45 days
after the end of each quarterly period of each fiscal year of the Company, (i) a
copy of the unaudited interim consolidated balance sheet of the Company as of
the end of each such quarter and the related unaudited interim consolidated
statements of income, shareholders equity and cash flow for such quarter and the
portion of the fiscal year through such date and setting forth in each case in
comparative form the respective figures for the corresponding date and period in
the previous fiscal year, in each case prepared by the Chief Financial Officer
and accompanied by a certificate executed by the Chief Financial Officer to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Company and its consolidated Subsidiaries on a consolidated basis in accordance
with Generally Accepted Accounting Principles consistently applied, subject to
normal year-end adjustments and the absence of footnotes, and (ii) a copy of the
comparative consolidating financial statements of the Company and its
consolidated Subsidiaries, prepared in accordance with Generally Accepted
Accounting Principles, consistently applied, which support the financial
statements delivered pursuant to clause (i);
(c) a certificate prepared and signed by the Chief Financial Officer
with each delivery required by clause (a) and (b), as to whether or not, as of
the close of such preceding period and at all times during such preceding
period, the Company and its Subsidiaries were in compliance with all the
provisions in this Agreement, showing computation of financial covenants and
quantitative negative covenants, and if the Chief Financial Officer shall have
obtained knowledge of any default in such compliance or notice of such default,
it shall disclose in such certificate such default or defaults or notice thereof
and the nature thereof, whether or not the same shall constitute a Default or an
Event of Default hereunder;
(d) a certificate prepared and signed by the Auditor with each
delivery required by clause (a) above stating whether they obtained knowledge
during the course of their examination of such financial statements of any
Default or Event of Default (which certificate
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may be limited to the extent required by any accounting rules or guidelines
binding upon the Auditors);
(e) at all times indicated in clause (a) above a copy of the
management letter, if any, prepared by the Auditor;
(f) as soon as available and in any event within fifteen (15) days
after the end of each month, accounts receivable aging summaries (by account
debtor), on a due date basis, with respect to the Company and each Guarantor, in
form and substance satisfactory to the Lender;
(g) promptly after filing thereof, copies of all regular and
periodic financial information, proxy materials and other information and
reports which the Company or any of its Subsidiaries shall file with the
Securities and Exchange Commission;
(h) promptly after submission to any government or regulatory
agency, all documents and information furnished to such government or regulatory
agency other than such documents and information prepared in the normal course
of business and which could not reasonably be expected to result in any
materially adverse action to be taken by such agency;
(i) as soon as available but in any event not later than the
fifteenth day of each calendar month a report of monthly sales, headcount and
inventory of the Company and the Guarantors prepared and certified by the Chief
Financial Officer, in the form attached hereto as Exhibit I; and
(j) promptly, from time to time, such other information regarding
the operations, business affairs and condition (financial or otherwise) of the
Company or any of its Subsidiaries as the Lender may reasonably request.
SECTION 6.04. Books and Records; Access to Premises. Keep adequate records
and proper books of record and account in which complete entries will be made in
a manner to enable the preparation of financial statements in accordance with
Generally Accepted Accounting Principles, and which shall reflect all financial
transactions of the Company and each Guarantor. At any time, and from time to
time (and provided that no Default or Event of Default has occurred and is
continuing, upon reasonable prior notice) permit the Lender or any agents or
representatives thereof, to examine and make copies of any abstracts from the
books and records of such information which the Lender deems is necessary or
desirable (including, without limitation, the financial records of the Company)
and to visit the properties of the Company or any Guarantor and to discuss the
affairs, finances and accounts of the Company and the Guarantor with any of
their executive officers or the Company's independent accountants.
SECTION 6.05. Notice of Adverse Change. Promptly notify the Lender in
writing of (a) any change in the business or the operations of the Company or
any Guarantor which could reasonably be expected to have a Material Adverse
Effect, and (b) any information which indicates that any financial statements
which are the subject of any representation contained in
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this Agreement, or which are furnished to the Lender pursuant to this Agreement,
fail, in any material respect, to present fairly, as of the date thereof and for
the period covered thereby, the financial condition and results of operations
purported to be presented therein, disclosing the nature thereof.
SECTION 6.06. Notice of Default. Promptly notify the Lender of any Default
or Event of Default which shall have occurred, which notice shall include a
written statement as to such occurrence, specifying the nature thereof and the
action (if any) which is proposed to be taken with respect thereto.
SECTION 6.07. Notice of Litigation. Promptly notify the Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against the
Company or any Guarantor on the basis of the allegations and information set
forth in the complaint or other notice of such action, suit or proceeding, or in
the amendments thereof, if any, could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.08. Notice of Default in Other Agreements. Promptly notify the
Lender of any default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which the Company or any Guarantor is a party which default could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.09. Notice of ERISA Event. Promptly deliver to the Lender a
certificate of the Chief Financial Officer of the Company setting forth details
as to such occurrence and such action, if any, which the Company, any Guarantor,
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the Company,
such Guarantor, ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator, with respect thereto: that a Reportable Event has occurred with
respect to a Plan, that an accumulated funding deficiency has been incurred or
an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan, that a Plan has been terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA, that one
or more Plans have an Unfunded Current Liability giving rise to a Lien under
ERISA, that proceedings may be or have been instituted to terminate a Plan, that
a proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan, or that the Company, any Guarantor or any
ERISA Affiliate will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. The Company will deliver
to the Lender a complete copy of the annual report (Form 5500) of each Plan that
is a single employer Plan (within the meaning of Section 4001(a)(15) of ERISA),
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lender pursuant to the first sentence hereof, copies of
annual reports and any other notices received by the Company or any Guarantor
required to be delivered to the Lender hereunder shall be delivered to the
Lender no later than ten days after the
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later of the date such report or notice has been filed with the Internal Revenue
Service or the PBGC, given to Plan participants or received by the Company or
any Guarantor.
SECTION 6.10. Notice of Environmental Law Violations. Promptly notify the
Lender of the receipt of any notice of an action, suit, and proceeding before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending against the Company or any
Guarantor relating to any alleged violation of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.11. Notice Regarding Material Contracts. Promptly notify the
Lender of (a) any termination (prior to the end of its stated term), material
amendment, material supplement or other material modification of any Material
Contract and (b) the occurrence of a default in any material respect by the
Company, any Guarantor or by any other party to any Material Contract of which
the Company is aware.
SECTION 6.12. Compliance with Applicable Laws. Comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, the breach of which could reasonably be expected to have
a Material Adverse Effect.
SECTION 6.13. Subsidiaries and Direct Affiliates. Give the Lender prompt
written notice of the creation, establishment or acquisition, in any manner, of
any Subsidiary of the Company and cause to be delivered to the Lender, within
thirty days of the creation, establishment or acquisition of such Subsidiary,
(i) a duly executed Unlimited Corporate Guaranty and Security Agreement, by each
such direct or indirect wholly-owned Domestic Subsidiary, and (ii) a duly
executed Limited Corporate Guaranty and Security Agreement, by any other
Domestic Subsidiary. The Company or its Domestic Subsidiaries, as applicable,
shall further execute and deliver to the Lender within such thirty day period a
Pledge Agreement with respect to 65% of the outstanding shares of capital stock
or other ownership interest of each such Subsidiary (or, if less, the aggregate
shares or interests owned by the Company and its Domestic Subsidiaries) which is
a Foreign Subsidiary, (in each case, together with certificates and powers with
respect to such interest duly endorsed in blank, and in the event of
uncertificated interest, UCC-1 financing statements identifying such interest
and executed by the Company or such Domestic Subsidiary). Together with the
delivery of such Guaranty, Security Agreement and/or Pledge Agreement, the
Company shall provide to the Lender (i) the supporting documents identified in
clauses (i), (ii) and (iii) of Section 5.01(e) in each case with respect to such
Subsidiary, (ii) a favorable written opinion of counsel in the form attached
hereto as Exhibit H and with respect to the documents required to be executed by
each Subsidiary pursuant to this Section 6.13, and (iii) a favorable written
opinion of local counsel to each Foreign Subsidiary, which opinion shall be
consistent in substance and as to the matters opined to in the opinion of local
counsel delivered pursuant to Section 5.01(d) on the Closing Date; further, give
the Lender prompt written notice of the creation, establishment or acquisition
in any manner of any New Direct Affiliate which is not a Subsidiary of the
Company.
SECTION 6.14. Environmental Laws. Comply in all material respects with the
requirements of all Environmental Laws, provide to the Lender all documentation
in
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connection with such compliance that the Lender may reasonably request, and
defend, indemnify, and hold harmless the Lender and its respective employees,
agents, officers, and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or otherwise, arising out
of, or in any way related to, (a) the presence, disposal, or release of any
Hazardous Materials on any property at any time owned or occupied by the Company
or any Subsidiary of the Company; (b) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Materials; (c) any lawsuit brought or threatened, settlement reached,
or government order relating to such Hazardous Materials, and/or (d) any
violation of applicable Environmental Laws, including, without limitation,
reasonable attorney and consultant fees, investigation and laboratory fees,
court costs, and litigation expenses.
SECTION 6.15. Notice and Acknowledgment of Assignment. In the event that
the average aggregate outstanding accounts receivable of the Company owing by
any Affiliate organized under any jurisdiction other than the laws of any state
or territory of the United States is greater than (x) $200,000, in any
consecutive 90 day period, with respect to any one such Affiliate, or $200,000,
in the aggregate, in any consecutive 90 day period, with respect to all such
Affiliates (excluding Affiliates which have previously executed and delivered a
Notice and Acknowledgment of Assignment), then within 30 Business Days of the
last day of such period, deliver to the Lender a Notice and Acknowledgment of
Assignment executed by the Company and such Affiliate(s), and (y) $500,000 in
any consecutive 90 day period, within 30 Business Days of the last day of such
period deliver to the Lender an opinion of counsel as to the due execution and
delivery of the Notice and Acknowledgment of Assignment executed by such
Affiliate.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lender that so long as the
Commitments remain in effect or any of the principal of or interest on any Note
or any other Obligations hereunder shall be unpaid, it will not, and will not
cause or permit any Guarantor, directly or indirectly to:
SECTION 7.01. Liens. Incur, create, assume or suffer to exist any Lien on
any of its assets now or hereafter owned, other than:
(a) Liens existing on the date hereof as set forth on Schedule I
attached hereto including any renewals or extensions thereof; provided that no
such Lien is extended to cover any additional property and that the amount of
Indebtedness secured thereby is not increased;
(b) Liens for taxes, assessments or other governmental charges or
levies not yet delinquent or which are being contested in good faith by
appropriate proceedings, provided, however, that adequate reserves with respect
thereto are maintained on the books of the Company in accordance with Generally
Accepted Accounting Principles;
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(c) carriers', warehousemens', mechanics', suppliers' or other like
Liens arising in the ordinary course of business and not overdue for a period of
more than 30 days or which, if so overdue, are being contested in good faith by
appropriate proceedings in a manner which will not jeopardize or diminish the
interest of the Lender;
(d) Liens incurred or deposits to secure the performance of tenders,
bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety, performance and appeal bonds, and other obligations of
similar nature incurred in the ordinary course of business;
(e) easements, rights of way, restrictions and other similar charges
or encumbrances which in the aggregate do not interfere in any material respect
with the occupation, use and enjoyment by the Company or any Guarantor of the
property or assets encumbered thereby in the normal course of their respective
business or impair the value of the property subject thereto;
(f) deposits under workmen's compensation, unemployment insurance
and social security laws;
(g) Liens granted to the Lender;
(h) purchase money Liens for fixed or capital assets including
obligations with respect to Capital Leases; provided in each case (i) no Default
or Event of Default shall have occurred and be continuing at the time of
creation of such Lien or shall occur after giving effect to such Lien, (ii) the
obligation secured by such purchase money Lien does not exceed 100% of the
purchase price of the asset and such Lien encumbers only, the asset acquired,
and (iii) such purchase money Lien does not secure any Indebtedness other than
in respect of the purchase price of the asset acquired; and
(i) Judgment and other similar Liens arising in connection with
court proceedings, provided, however, that the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings.
SECTION 7.02. Indebtedness. Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as described in
Schedule II attached hereto, including any renewals or extensions thereof;
provided such renewal or extension does not result in an increase in the
aggregate principal amount of such Indebtedness;
(b) Indebtedness to the Lender;
(c) Indebtedness for trade payables incurred in the ordinary course
of business; provided, subject to Section 6.02, such payables shall be paid or
discharged when due;
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(d) Indebtedness consisting of guarantees and loans permitted
pursuant to Sections 7.03 and 7.06, respectively, or consisting of Liens
permitted pursuant to Section 7.01 (other than Section 7.01(h));
(e) Subordinated Indebtedness; provided, however, that no Default or
Event of Default shall have occurred and be continuing at the time of incurrence
of such Subordinated Indebtedness or would occur after giving effect to the
incurrence of such Subordinated Indebtedness; and
(f) Indebtedness secured by purchase money liens (including Capital
Leases) as permitted under Section 7.01(h); provided such Indebtedness incurred
in any fiscal year of the Company shall not exceed $250,000 in the aggregate
with respect to the Company and the Guarantors and, further, provided no Default
or Event of Default shall have occurred and be continuing at the time of
incurrence of such Indebtedness or would occur after giving effect to the
incurrence of such Indebtedness.
SECTION 7.03. Guaranties. Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
(a) guaranties executed prior to the date hereof as described on
Schedule III attached hereto but not including any renewals or extension
thereof;
(b) endorsements of negotiable instruments for collection or deposit
in the ordinary course of business;
(c) guaranties of any Indebtedness owing to the Lender;
(d) guaranties by the Company of the obligations of its New Direct
Affiliates provided that: (i) the aggregate outstanding obligations of all New
Direct Affiliates guaranteed by the Company shall not exceed, at any time,
$200,000, less the sum of (A) the aggregate outstanding principal amount of all
loans and capital contributions to New Direct Affiliates permitted pursuant to
Section 7.06(b), and (B) the aggregate purchase price of all assets and
businesses acquired pursuant to acquisitions permitted pursuant to Section 7.12;
and (ii) the sum of (A) the aggregate outstanding obligations of all New Direct
Affiliates guaranteed by the Company, (B) the aggregate outstanding principal
amount of loans and capital contributions to all New Direct Affiliates permitted
pursuant to Section 7.06(b), (C) the aggregate purchase price
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of all assets and businesses acquired pursuant to acquisitions permitted
pursuant to Section 7.12, and (D) the aggregate Existing Direct Affiliate
Investments, shall not exceed $3,900,000, in the aggregate, at any time; and
(e) guaranties by the Company of the obligations of its Existing
Direct Affiliates, provided that (i) the aggregate outstanding obligations of
any single Existing Direct Affiliate guaranteed by the Company shall not exceed
the amount set forth opposite such Existing Direct Affiliate's name on Schedule
VI less the aggregate outstanding loans and capital contributions made to such
Existing Direct Affiliate pursuant to Section 7.06(c) and (ii) the sum of (A)
the aggregate outstanding obligations of all New Direct Affiliates guaranteed by
the Company pursuant to subsection (d) above, (B) the aggregate outstanding
principal amount of loans and capital contributions to all New Direct Affiliates
permitted pursuant to Section 7.06(b), (C) the aggregate purchase price of all
assets and businesses acquired pursuant to acquisitions permitted pursuant to
Section 7.12, and (D) the aggregate Existing Direct Affiliates Investments,
shall not exceed $3,900,000, in the aggregate, at any time.
SECTION 7.04. Sale of Assets. Sell, lease, transfer or otherwise dispose
of its properties and assets, whether or not pursuant to an order of a federal
agency or commission, except for (a) the sale of inventory disposed of in the
ordinary course of business, and (b) the sale or other disposition of properties
or assets no longer used or useful in the conduct of its business.
SECTION 7.05. Sales of Receivables. Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to the Company
or any Guarantor with or without recourse, except for collection in the ordinary
course of business; provided, however, nothing in this Section 7.05 shall be
deemed to limit the Company or any Guarantor from granting discounts and rebates
to its customers or compromising or otherwise accepting less than the full
amount of any receivable due from the customer, in each case, in the ordinary
course of the Company's or such Guarantor's business, consistent with past
practice.
SECTION 7.06. Loans and Investments. Make or commit to make any advance,
loan, extension of credit, or capital contribution to, or purchase or hold
beneficially any stock or other securities or evidence of Indebtedness of, or
purchase or acquire all or a substantial part of the assets of, or make or
permit to exist any interest whatsoever in, any other Person except (a)
investments consisting of Eligible Investments; (b) loans and capital
contributions by the Company to its New Direct Affiliates provided that (i) the
sum of (A) the aggregate outstanding principal amount of all loans and capital
contributions to New Direct Affiliates, (B) the aggregate outstanding
obligations of all New Direct Affiliates guaranteed by the Company permitted
pursuant to Section 7.03(d), and (C) the aggregate purchase price of all assets
and businesses acquired pursuant to acquisitions permitted pursuant to Section
7.12, shall not exceed $200,000, at any time; (ii) the sum of (A) the aggregate
outstanding principal amount of all loans and capital contributions to New
Direct Affiliates, (B) the aggregate outstanding obligations of all New Direct
Affiliates guaranteed by the Company permitted pursuant to Section 7.03(d), (C)
the aggregate purchase price of all assets and businesses acquired pursuant to
acquisitions permitted pursuant to Section 7.12, and (D) the aggregate Existing
Direct Affiliates Investments,
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shall not exceed an amount equal to $3,900,000, at any time; and (iii) each New
Direct Affiliate is engaged in a business similar in all material respects to
the business of the Company; (c) Existing Direct Affiliate Investments, provided
that the sum of (A) the Existing Direct Affiliate Investments, (B) the aggregate
outstanding principal amount of all loans and capital contributions to all New
Direct Affiliates permitted pursuant to this Section 7.06, (C) the aggregate
outstanding obligations of all New Direct Affiliates guaranteed by the Company
permitted pursuant to Section 7.03(d), and (D) the aggregate purchase price of
all assets and businesses acquired pursuant to acquisitions permitted pursuant
to Section 7.12, shall not exceed an amount equal to $3,900,000, at any time;
and (d) transactions permitted pursuant to Section 7.12. Notwithstanding the
foregoing, no investment permitted pursuant to the preceding clauses (b), (c)
and (d) shall be made if a Default or Event of Default shall have occurred or be
continuing or would occur after giving effect to such loan or investment.
SECTION 7.07. Nature of Business. Change or alter, in any material
respect, the nature of its business from the nature of the business engaged in
by it on the date hereof.
SECTION 7.08. Sale and Leaseback. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, of it, if at the time of such sale or disposition it intends
to lease or otherwise acquire the right to use or possess (except by purchase)
such property or like property for a substantially similar purpose.
SECTION 7.09. Federal Reserve Regulations. Permit any Loan or the proceeds
of any Loan to be used for any purpose which violates or is inconsistent with
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
SECTION 7.10. Accounting Policies and Procedures. Permit any change in the
accounting policies and procedures of the Company or any Guarantor, including a
change in fiscal year, provided, however, that any policy or procedure required
to be changed by the Financial Accounting Standards Board (or other board or
committee thereof) in order to comply with Generally Accepted Accounting
Principles may be so changed.
SECTION 7.11. Hazardous Materials. Cause or permit any of its properties
or assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance, in all material respects, with all applicable federal, state and
local laws or regulations, or cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company or any Guarantor, a release
of Hazardous Materials onto such property or asset or onto any other property in
violation, in any material respect, of any applicable Environmental Law.
SECTION 7.12. Limitations on Fundamental Changes. Merge or consolidate
with, or sell, assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets (whether
now or hereafter acquired) to, any Person, or, acquire all of the stock or all
or substantially all of the assets or the business of any Person or liquidate,
wind up or dissolve or suffer any liquidation or dissolution. Notwithstanding
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the foregoing, the Company may acquire all or substantially all of the assets or
the business of any Person provided that (a) the aggregate purchase price for
all such acquisitions shall not exceed, at any time, an amount equal to
$200,000, less the sum of (A) the aggregate outstanding principal amount of all
loans and capital contributions to any New Direct Affiliate permitted pursuant
to Section 7.06, and (B) the aggregate outstanding obligations of New Direct
Affiliates guaranteed by the Company permitted pursuant to Section 7.03(d); (b)
the sum of (A) the aggregate purchase price of all such acquisitions permitted
pursuant to this Section 7.12 and (B) the aggregate outstanding principal amount
of all loans and investments in New Direct Affiliates permitted pursuant to
Section 7.06(c), (C) the aggregate outstanding obligations of New Direct
Affiliates guaranteed by the Company permitted pursuant to Section 7.03(d), and
(D) the aggregate Existing Direct Affiliates Investments, shall not exceed
$3,900,000, in the aggregate, at any time; (c) no Default or Event of Default
shall have occurred and be continuing prior to or, would occur after giving
effect to, the proposed acquisition, (d) the assets or business acquired are
used or useful in the Company's existing lines of business and (e) in the event
of the acquisition of stock or other equity interest, such acquisition is not
opposed by the board of directors or other governing body of such Person.
SECTION 7.13. Financial Covenants.
(a) Consolidated Tangible Net Worth. Permit at any time Consolidated
Tangible Net Worth to be less than the amount set forth below opposite the
applicable period:
Period Amount
------ ------
Closing Date through June 29, 2003 $17,500,000
June 30, 2003 through September 29, 2003 $18,125,000
September 30, 2003 through September 29, 2004 $18,700,000
Each period of September 30 through September Actual Consolidated Tangible
29 thereafter Net Worth as of the last day
of the fiscal year ending
immediately prior to the first
day of such period plus
$2,000,000.
(b) Consolidated Interest Coverage Ratio.
(i) Permit the Consolidated Interest Coverage Ratio, at the
end of the following fiscal quarters, to be less than the ratio set
forth set forth below opposite the applicable fiscal quarter end:
Fiscal Quarter Ending Ratio
--------------------- -----
Two fiscal quarters ending March 31, 2003 1.75:1.00
Three fiscal quarters ending June 30, 2003 2.75:1.00
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(ii) Commencing with the fiscal quarter ending September 30,
2003, permit the Consolidated Interest Coverage Ratio to be less
than 3.00:1.00, at any time.
(c) Consolidated Funded Debt to Consolidated EBITDA.
(i) Permit the ratio of Consolidated Funded Debt to
Consolidated EBITDA, at the end of the following fiscal quarters, to
be greater than the ratio set forth set forth below opposite the
applicable fiscal quarter end:
Fiscal Quarter Ending Ratio
--------------------- -----
Fiscal quarter ending December 31, 2002 4.25:1.00
Two fiscal quarters ending March 31, 2003 2.95:1.00
Three fiscal quarters ending June 30, 2003 1.75:1.00
(ii) Commencing with the fiscal quarter ending September 30,
2003, permit the ratio of Consolidated Funded Debt to Consolidated
EBITDA to be greater than 1.75:1.00, at any time.
(d) Consolidated Interim EBIT. Permit Consolidated Interim EBIT to
be less than (i) ($500,000), for the fiscal quarter ending September 30, 2002 or
(ii) $60,000, for the fiscal quarter ending December 31, 2002.
(e) Consolidated Total Unsubordinated Liabilities to Consolidated
Tangible Net Worth. Permit at any time the ratio of Consolidated Total
Unsubordinated Liabilities to Consolidated Tangible Net Worth to be greater than
..50:1.00.
(f) Consolidated Quick Assets to Consolidated Current Liabilities.
Permit at any time the ratio of Consolidated Quick Assets to Consolidated
Current Liabilities to be less than the ratio set forth below opposite the
applicable period:
Period Ratio
------ -----
Closing Date through September 29, 2002 1.50:1.00
September 30, 2002 through December 30, 2002 1.70:1.00
December 31, 2002 through September 29, 2003 1.90:1.00
September 30, 2003 and thereafter 2.00:1.00
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SECTION 7.14. Subordinated Debt. Directly or indirectly prepay, defease,
purchase, redeem, or otherwise acquire any Subordinated Debt (other than in
accordance with the subordination provisions thereof which provisions were
approved by the Lender in accordance with the definition of "Subordinated Debt")
or amend, supplement or otherwise modify any of the terms thereof without the
prior written consent or approval of the Lender.
SECTION 7.15. Dividends. Declare any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of stock of the Company or any Guarantor or any warrant to purchase
any class of stock of the Company or any Guarantor, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash, securities or property or in obligations of the
Company or any Guarantor or in any combination thereof, or permit any Subsidiary
to make any payment on account of, or purchase or otherwise acquire, any shares
of any class of the stock of the Company or any Guarantor or any warrant to
purchase any class of stock of the Company or any Guarantor from any Person.
Notwithstanding the foregoing (a) each wholly-owned Guarantor of the Company may
declare or pay dividends to any other wholly-owned Guarantor of the Company or
to the Company.
SECTION 7.16. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Company's or Guarantor's
business and upon fair and reasonable terms no less favorable to the Company or
relevant Guarantor than they would obtain in a comparable arms-length
transaction with a Person not an Affiliate; provided, however, the Company may
extend loans to the Company's Direct Affiliates at below market interest rates,
provided the aggregate outstanding principal amount of all such indebtedness
accruing interest at such rates shall not exceed $50,000 at any one time.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. In the case of the happening of any of
the following events (each an "Event of Default"):
(a) failure to pay the principal of or interest on any Loan, or any
fees under this Agreement as and when due and payable and, with respect to
interest and fee payments only, such failure shall continue unremedied for a
period of three Business Days;
(b) default shall be made in the due observance or performance of
(i) any covenant, condition or agreement set forth in Section 6.01, 6.02, 6.11,
6.12 or 6.14 if such
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default shall continue unremedied for a period of 30 days or (ii) any other
covenant, condition or agreement of the Company to be performed pursuant to this
Agreement or of the Company or any Guarantor to be performed pursuant to any
other Loan Document (other than those specified in clause (a) of this Section
8.01);
(c) any representation or warranty made or deemed made in this
Agreement or any other Loan Document or in any report, certificate, financial
statement or other instrument furnished in connection with this Agreement or any
other Loan Document or the borrowings hereunder shall prove to be false or
misleading in any material respect when made or when deemed made;
(d) default in the performance or compliance in respect of any
agreement or condition relating to any Indebtedness of the Company or any
Guarantor in excess of $50,000 individually or in the aggregate (other than the
Notes) if the effect of such default is to accelerate the maturity of such
Indebtedness or to permit the holder or obligee thereof (or a trustee on behalf
of such holder or obligee) to cause such Indebtedness to become due prior to the
stated maturity thereof, or, except as otherwise expressly permitted pursuant to
Section 6.02, any such Indebtedness shall not be paid when due;
(e) the Company or any Guarantor shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency or similar law,
(ii) consent to the institution of, or fail to controvert in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the employment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any Guarantor or for a
substantial part of its property; (iv) file an answer admitting the material
allegations of a petition filed against it in such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) take corporate action for
the purpose of effecting any of the foregoing; or (vii) become unable or admit
in writing its inability or fail generally to pay its debts as they become due;
or any of the actions identified in the preceding clauses (i) through (vii)
shall have occurred with respect to any Guarantor;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any Guarantor or of a substantial part of its
property, under Title 11 of the United States Code or any other federal or state
bankruptcy insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
Guarantor or for a substantial part of their property, or (iii) the winding-up
or liquidation of the Company or any Guarantor and in any such case such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall continue unstayed and in
effect for 60 days;
(g) one or more orders, judgments or decrees for the payment of
money in excess of $50,000 in the aggregate shall be rendered against the
Company or any Guarantor and the same shall not have been paid in accordance
with such judgment, order or decree or
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settlement and either (i) an enforcement proceeding shall have been commenced by
any creditor upon such judgment, order or decree, or (ii) there shall have been
a period of thirty (30) days during which a stay of enforcement of such
judgment, order or decree, by reason of pending appeal or otherwise, was not in
effect;
(h) any Plan shall fail to maintain the minimum funding standard
required for any Plan year or part thereof or a waiver of such standard or
extension of any amortization period is applied for or granted under Section 412
of the Code, any Plan is terminated by the Company, any Guarantor or any ERISA
Affiliate or the subject of termination proceedings under ERISA, any Plan shall
have an Unfunded Current Liability, a Reportable Event shall have occurred with
respect to a Plan or the Company, or any ERISA Affiliate shall have incurred a
liability to or on account of a Plan under Section 515, 4062, 4063, 4201 or 4204
of ERISA, and there shall result from any such event or events the imposition of
a lien upon the assets of the Company or any Guarantor, the granting of a
security interest on such assets, or a liability to the PBGC or a Plan or a
trustee appointed under ERISA or a penalty under Section 4971 of the Code;
(i) any material provision of any Loan Document shall for any reason
cease to be in full force and effect in accordance with its terms or the Company
or any Guarantor shall so assert in writing;
(j) a Change of Control shall have occurred;
(k) any Guarantor shall fail to perform or observe any term or
provision of the Guaranty (subject, with respect to Section 4(b) of the
Guaranty, to the same grace period, if any, as would apply under this Section
8.01 to the Company's performance or observance of the applicable covenant) or
any representation or warranty made by any Guarantor in connection with such
Guarantor's Guaranty shall prove to have been incorrect in any material respect
when made or deemed made;
(l) any of the Liens purported to be granted pursuant to any
Security Document shall cease for any reason to be legal, valid and enforceable
Liens on the collateral purported to be covered thereby or have the priority
purported to be created thereby;
(m) either Australia Joint Venture Agreement shall cease to be in
full force and effect on substantially the same terms as in effect on the dates
of execution thereof and the purchase of supplies thereunder shall have ceased
to continue on a monthly basis in substantially the same quantities as had been
purchased on a comparable monthly basis during the twelve months preceding the
date such agreement ceased to be in full force and effect and such cessation in
the quantity of goods purchased is material to the Company on a consolidated
basis based on the revenue derived from such goods to the revenue derived from
all goods sold; or
(n) Aristocrat Leisure Limited shall cease to have a rating of at
least BB+ (or its equivalent) or better from Standard & Poor's Ratings Group, it
being acknowledged that such entity's rating as of the date hereof is BBB-;
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then, at any time thereafter during the continuance of any such event, the
Lender may, in its sole discretion, by written or telephonic notice to the
Company, take either or both of the following actions, at the same or different
times, (a) terminate the Commitments and (b) declare (i) the Notes, both as to
principal and interest, and (ii) all other Obligations, to be forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(e) or (f) shall have occurred, the Commitments shall automatically
terminate and interest, principal and amounts referred to in the preceding
clauses (i) and (ii) shall be immediately due and payable without presentment,
demand, protest, or other notice of any kind, all of which are expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
telecopy), and unless otherwise expressly provided herein, shall be conclusively
deemed to have been received by a party hereto and to be effective on the day on
which delivered by hand to such party or one Business Day after being sent by
overnight mail to the address set forth below, or, in the case of telecopy
notice, when acknowledged as received, or if sent by registered or certified
mail, three (3) Business Days after the day on which mailed in the United
States, addressed to such party at such address:
(a) if to the Lender, at
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Relationship Manager for
Global Payment Technologies, Inc.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, at
Global Payment Technologies, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President & Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
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(c) as to each such party at such other address as such party
shall have designated to the other in a written notice
complying as to delivery with the provisions of this Section
9.01.
SECTION 9.02. Effectiveness; Survival. This Agreement shall become
effective on the date on which all parties hereto shall have signed a
counterpart copy hereof and shall have delivered the same to the Lender. All
representations and warranties made herein and in the other Loan Documents and
in the certificates delivered pursuant hereto or thereto shall survive the
making by the Lender of the Loans, in each case, as herein contemplated and the
execution and delivery to the Lender of the Notes evidencing the Loans and shall
continue in full force and effect so long as the Obligations hereunder are
outstanding and unpaid and the Commitments are in effect. The obligations of the
Company pursuant to Section 3.07, Section 3.08, Section 3.10 and Section 9.03
shall survive termination of this Agreement and payment of the Obligations.
SECTION 9.03. Expenses. The Company agrees (a) to indemnify, defend and
hold harmless the Lender and its officers, directors, employees, and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities or judgments to which any such indemnified person may be
subject and arising out of or in connection with the Loan Documents, the
financings contemplated hereby, the use of any proceeds of such financings or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any of such indemnified persons
is a party thereto, and to reimburse each of such indemnified persons upon
demand for any reasonable, legal or other expenses incurred in connection with
the investigation or defending any of the foregoing; provided that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities, judgments or related expenses to the extent arising from
the wilful misconduct or gross negligence of such indemnified person, (b) to pay
or reimburse the Lender for all its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of and any amendment,
supplement or modification to this Agreement, the Notes any other Loan
Documents, and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including without limitation, the reasonable fees and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇▇, P.C., counsel to the Lender, and (c) to pay or reimburse the Lender for
all their costs and expenses incurred in connection with the enforcement and
preservation of any rights under this Agreement, the Notes, the other Loan
Documents, and any other documents prepared in connection herewith or therewith,
including, without limitation, the reasonable fees and disbursements of counsel
(including, without limitation, in-house counsel) to the Lender, including all
such out-of-pocket expenses incurred during any work-out, restructuring or
negotiations in respect of the Obligations.
SECTION 9.04. Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company, the Lender, all future holders of the Notes and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Lender.
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(b) The Lender reserves the right to sell participations in or to
sell and assign its rights, duties or obligations with respect to the Loans or
the Commitments to such banks, lending institutions or other financial
institutions as it may choose and without the consent of the Company. The Lender
may furnish any information concerning the Company in its possession from time
to time to any assignee or participant (or proposed assignee or participant).
The Lender may at any time pledge or assign or grant a security interest in all
or any part of its rights under this Agreement and its Notes to a Federal
Reserve Bank, provided that no such assignment shall release the transferor
Lender from its Commitments or its obligations hereunder or substitute any such
pledgee or assignee for the Lender as a party to this Agreement.
SECTION 9.05. No Waiver; Cumulative Remedies. Neither any failure nor any
delay on the part of the Lender in exercising any right, power or privilege
hereunder or under any Note or any other Loan Document shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege. The rights, remedies,
powers and privileges herein provided or provided in the other Loan Documents
are cumulative and not exclusive of any rights, remedies powers and privileges
provided by law.
SECTION 9.06. APPLICABLE LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 9.07. SUBMISSION TO JURISDICTION; JURY WAIVER. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ OF NASSAU OR COUNTY OF SUFFOLK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL OR
STATE COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT
REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER HEREOF THEREOF MAY NOT BE
LITIGATED IN OR BY SUCH FEDERAL OR STATE COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY AGREES NOT TO (i) SEEK AND HEREBY WAIVES THE RIGHT
TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH FEDERAL OR STATE COURT BY ANY FEDERAL
OR STATE COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO
GRANT AN ENFORCEMENT OF SUCH JUDGMENT OR (ii)
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ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING UNLESS SUCH
COUNTERCLAIM CONSTITUTES A COMPULSORY COUNTERCLAIM UNDER APPLICABLE RULES OF
CIVIL PROCEDURE. THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT
BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS
AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. EACH PARTY HERETO
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT. EXCEPT AS PROHIBITED BY LAW,
THE COMPANY WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THIS SECTION 9.07, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE COMPANY (I) CERTIFIES THAT NEITHER THE LENDER NOR ANY
REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS OR THE OTHER WAIVERS CONTAINED IN THIS AGREEMENT
AND (II) ACKNOWLEDGES THAT IN ENTERING INTO THIS AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS, THE LENDER IS RELYING UPON, AMONG OTHER ITEMS, THE WAIVERS
AND CERTIFICATIONS CONTAINED IN THIS SECTION 9.07.
SECTION 9.08. Severability. In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
SECTION 9.09. Right of Setoff. If an Event of Default shall have occurred
and be continuing, the Lender and each of its Affiliates are hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender or any Affiliate of the Lender to or for the credit or the account
of the Company against any and all of the Obligations of the Company now and
hereafter existing under this Agreement and the Notes held by the Lender,
irrespective of whether or not the Lender shall have made any demand under this
Agreement or any Note and although such obligations may be unmatured. The rights
of the Lender and each Affiliate of the Lender under this Section 9.09 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which they may have.
SECTION 9.10. Headings. Section headings used herein are for convenience
of reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
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SECTION 9.11. Construction. This Agreement is the result of negotiations
between, and has been reviewed by, each of the Company, the Lender and their
respective counsel. Accordingly, this Agreement shall be deemed to be the
product of each party hereto, and no ambiguity shall be construed in favor of or
against either the Company or the Lender.
SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Company and the Lender have caused this Agreement
to be duly executed by their duly authorized officers, as of the day and year
first above written.
GLOBAL PAYMENT TECHNOLOGIES, INC.
By: ____________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
JPMORGAN CHASE BANK
By: ____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
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SCHEDULE I
Existing Liens
NONE
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SCHEDULE II
Pre-Existing Indebtedness
NONE
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SCHEDULE III
Existing Guarantees
NONE
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SCHEDULE IV
Material Contracts
Lease dated September 21, 1994 between Global Payment Technologies, Inc. and
Heartland Associates
Amendment dated July 31, 1997 to lease dated September 21, 1994 between Global
Payment Technologies, Inc. and Heartland Associates
Amendment dated October 1, 2000 to lease dated September, 1994 between Global
Payment Technologies, Inc. and Heartland Associates
1994 Stock Option Plan
1996 Stock Option Plan
2000 Stock Option Plan
Employment Agreement dated September 1, 2001 between Global Payment
Technologies, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇
Employment Agreement dated May 1, 1999 between Global Payment Technologies, Inc.
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Employment Agreement dated July 1, 2001 between Global Payment Technologies,
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Agreement dated July 5, 2001 between Aristocrat Technologies Australia Pty.
Limited and Global Payment Technologies Australia Pty. Ltd.
Agreement dated June 20, 2001 between Global Payment Technologies, Inc. and
Global Payment Technologies Australia Pty. Ltd.
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SCHEDULE V
Subsidiaries and other Direct Affiliates
SUBSIDIARIES
1. Global Payment Technologies (Europe) Limited
Jurisdiction: United Kingdom
Shareholders: GPT (100%)
2. Abacus Financial Management Systems Ltd. USA
Jurisdiction: New York
Shareholders: GPT (80%); ▇▇▇▇▇ ▇▇▇▇▇▇▇ (20%)
NON-SUBSIDIARIES:
1. Global Payment Technologies Holdings (Proprietary) Limited
Jurisdiction: South Africa
Shareholders: GPT (24.2%); ▇▇▇▇▇▇ Consolidated Investments (70.5%);
The Bevin Trust (4.2%); Management (1.1%)
2. International Payment Systems Pty., Ltd.
Jurisdiction: South Africa
Shareholders: ▇▇▇▇▇▇ Consolidated Investments (30%); Bevin Trust
(30%); GPT (30%); Management (10%)
1. Global Payment Technologies Australia Pty. Ltd.
Jurisdiction: Australia
Shareholders: GPT (50%); ▇▇▇▇▇ ▇▇▇▇▇▇ (50%)
2. Abacus Financial Management Systems Ltd.
Jurisdiction: United Kingdom
Shareholders: GPT (25%); ▇▇▇▇▇ ▇▇▇▇▇▇▇ (75%)
3. eCash Management Pty. Ltd.
Shareholders: GPT (35%); ▇▇▇▇▇ ▇▇▇▇▇▇ (35%); ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (30%)
4. Globaltrac LLC
Jurisdiction: New York
Shareholders: GPT (50%); Tabletrac, Inc. (50%)
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SCHEDULE VI
Existing Direct Affiliate Investments
Aggregate Permitted Loans, Guarantee
Existing Direct Affiliate Obligations, and Capital Contributions
------------------------- --------------------------------------
Global Payment Technologies Holdings $1,650,000
(Proprietary) Limited
Global Payment Technologies Australia Pty. Ltd. $ 100,000
Global Payment Technologies (Europe) Limited $ 750,000
Abacus Financial Management Systems Ltd. $1,000,000
Abacus Financial Management Systems Ltd., USA $ 400,000
----------
TOTAL $ 3,900,00
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